I believe that this flared part of the wheel arch, is there to pass homolongation rules for the USA market. More specifically, the distance of the wheel arch and the wheel must be at least X amount and when that is not the case then manufacturers raise the wheel arch just a tiny bit.
In some cases, the manufacturers don't make separate wheel arch parts for the USA market (like when the arch is not plastic), so they screw a set of extensions by hand.
I could be wrong, but at least that is what I remember. Please correct me if I'm wrong.