I want to reduce the callout text padding

Custom CSS & Theme Design
12

That’s because what you’re see in the callouts is rendered, in the same way you would see them in the Reading view. That non-callout content in Live Preview is an approximation of the “real” rendering. You can target the real rendering with .markdown-rendered.

In the default theme, you can do it like this:

.markdown-rendered *:is(ul, ol, p, table) {
	margin-block-end: 0;
	margin-block-start: 0;
}

If that works for you, cool. If not, you might have to use the inspector to find the more specific selectors (aka “words”) needed for the theme you’re using.