This is not technically the reason. It's a benefit of the way the lines operate though
They inflate wait times all day long, not just at closing. However, the stand by wait time posted close to closing includes FP returnees. But, there are no FP returnees after closing since FP distribution ends at closing time. And they stop updating wait times close to closing. So stand by times are off even more. Plus, you have even more no show FP late at night than any other time of day. More guests who decide not to go back to the park at night, leave early, don't use their late FP for whatever reason. So there are a whole lot of reasons why there are fewer FP returnees at night and anytime you have fewer FP returnees you have shorter stand by wait times.