Appointments that span two days but are less than 24 hours are displayed on the calendar as two appointments, one from the start time to midnight, a second one for midnight to the end time, as seen in this screenshot. This is how it has always "worked" in Outlook and most people consider it the "correct" behavior.
If you are showing end times and the calendar is wide enough, the end times will also display.
To add the end times to the view, go to the View tab, View Settings, Other Settings button and enable end times.
The Change Everyone Hated
The product team listened to the extensive negative feedback and reverted to the way it worked previously (and described at the top of this article), as of the March 9 2016 update.
The December 2015 update for Outlook 2010 (KB 3114409) changed the behavior of appointments which span midnight (for example 8 PM – 5 AM) but are less than 24 hours long. Everyone hated seeing all appointments that spanned 2 days as one appointment spanning multiple days. This the same way that appointments that are longer than 24 hours display in Outlook's calendar. (It's possible users would have been ok with the change if the end time was correct, rather than always displaying 12:00 AM)
In the day or week view these appointments are in the all-day appointment section, with the time period shaded if the appointment is marked Busy, Out of Office, or categorized. The period for Tentative appointments has hash marks, although they are almost as invisible as Free appointments.
There is one problem: the appointments include the start and end times; however, the end time is always 12:00 AM. When you hover over the appointment the correct end time is displayed in the screen tip.
A second issue is the lack of visibility. Yes, busy, out of office and categorized appointments are easy to see, but only if the calendar color is not too close to the appointment color. Appointments marked Free won't show up at all.
This sample shows the unwanted behavior with appointments marked Tentative, categorized, Busy, Out of Office, and Free. (Because the days are narrow, the start and end times don't display.)