When looking closely at the server icon you will notice that the last bottom and right rows of pixels of the server icon are cut off!
Full image:
[media]
Minecraft Server List:
[media]
MC-265043
Server icon not centered
Open
0
(Unassigned)
Community Consensus
Platform
Low
Dedicated Server
1.20.1, 1.20.4
Retrieved
The icon is not cut off, but instead the entire resolution of the icon image is warped as it's scaled to an uneven resolution which is not an equal multiplication of what it previously was. This is why the artifacting is caused.
Zooming in on the attached icon you've provided, you can see the whole image is uneven, rather than simply cut off at the bottom and right:
[media]