Why does the seam allowance shrink as it approaches the top of the slit?

To keep the look of two straight lines meeting each other at a point, both stitch lines must appear straight, not curved or bent at a sharp angle. Take a look at the first diagram below. It represents a slit in a piece of fabric:

If you try to stitch around the slit exactly 1/2" (or 5/8") away from it, here are examples of what you might get:

On the outside, gores stitched these ways would look like this, respectively:

If you stitch around the slit as seen below, you will get the appearance of two straight lines meeting in a point on the front of the fabric:

This is why your seam allowance is tiny at the beginning of the slit and large at the end.

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