Anyone else have this problem?
Try this: go to Calendar and schedule an event that lasts 24 hours - for example, an appointment that starts at 7AM on July 17 and ends at 7AM on July 18. After you've saved the appointment, take a look at it again - has it changed to an "All Day" event? In the example I gave, this appointment will have changed to "All Day" on July 17.
The funny thing is, the appointment syncs and displays correctly in Google Calendar online.
I use the Calendar a lot (and schedule a lot of 24 hour events starting at 7AM), so this issue is really bugging me.