The squared off arch is a very dated design cue and something I'm not a big fan of. I suspect though that it may contribute to the car's aerodynamics. From what I've been able to puzzle my way through the upper rear area of a wheel tub is a high pressure zone, and having a larger opening in that corner while squaring off the top to minimize the overall open area might give the best ventilating effect and reduce drag.
*disclaimer: I'm no aerodynamicist, this is just my suspicion from eyeball and some research.
Still, I think it looks like junk, particularly on a lowered car.
Here's one of the sketches I've done up for the restoration of my car. I intend to raise the top of the arch slightly and fill in the flattened area to create a round profile that resembles the front wheel. This will also entail modifying the bumper and skirts to help fill in the open space:
Once I complete my 3D model of the SVX I'm hoping to use it to perform some CFD analysis and comparisons to the body modifications I want to do. I'm not worried if I don't match the .29 cd of the real car, just looking for comparative analysis. It would be interesting to see if that sheds any light on the design of the SVX.