Battery Discharged - But Potential difference exists without any current flow
0% is an abstraction,

The voltage will never actually be 0V, but the batteries ability to provide current is greatly reduced and there is possibly  risk to damage the battery permanently.
The battery controller says &quot;no more &quot; and shuts it down.
The open circuit (no load) voltage of a battery is dictated by chemistry and does not change much.

Strict USB spec is 4.4- 5V is allowed range. So it is legal.

Everything in real life has a margin, that is there is always +/- around every specification. Some derating (reduced voltage , lifetime, current or other spec )  at 100% nominal load is typical.
These supplies are often designed to be inexpensive and do not have much &quot;headroom&quot; .