Colour bleeding into shape

Hi, when cutting out one part of one side of a large rectangle and placing another rectangle on top with the bottom cut out, the white colour from the smaller rectangle bleeds into the other.

I can’t change the fill colour on the large rectangle as it resists. What I’m trying to do is keep the small rectangle white, the large rectangle grey but keep the specific parts on each deleted.

Thanks in advance

Please see image.

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