The items appear with the dot and not the background color because they're built with a time of day on them. Remove the time so that start is just the date (ie. 2021-12-07), then they get the background color correctly as expected so the question now becomes how to get the background color even with the time of day on them...
Referencing
I've added backgroundColor values to my events, but this only seems to change the dot on the events:
You'll notice that using extendedProps to set the background color doesn't work either.
I'm trying to get the event to appear in a block of the given color similar to this:

Here's my events array; how can I get fullcalendar to change the background color on the event?
events: [
{
title: 'event1',
start: '2021-12-07T08:00:00',
backgroundColor: '#ff00ff'
},
{
title: 'event3',
start: '2021-12-07T09:00:00',
backgroundColor: '#4d96f1'
},
{
title: 'event2',
start: '2021-12-08T08:00:00',
backgroundColor: '#00ff00',
extendedProps: {
backgroundColor: '#00ff00'
},
}
],
You can also keep the timed events aspect but showing them as the same way as in all day by just adding eventDisplay:'block', in your Fullcalendar's parameters.