I'm unsure if this is true for other games but for Magic Garden I got the "new lowest time" icon after finishing a run and showed the completed time as 03:50.65, but my previous best time was 03:50.273. Is this just a formatting error and the actual IGT is 03:50.065?

Yeah it seems to be a formatting error. It's been reported in the bug-reports thread in the discord as of yesterday.