OK, it isn't "dead space" in the sense that the liquid is lost, but the liquid outside the malt basket is outside the volume where the mash conversion takes place. I'm not sure how important this is, but supposedly mash thickness does have an impact on enzyme activity, hence conversion...

I brew all grain, and I use a malt basket in the kettle when mashing. The basket leaves 4-5 liters of liquid outside the basket, which I need to take into account when I calculate the mash thickness. Not a big deal, but it would be useful to have an entry for "mash dead space" in the My...