Layout groups have a built-in minimum height of 28 pixels. % - percent based sizing is a bit difficult because container in dynamic or smart layouts never specify height. % height configuration is supported only on Free Form layouts where designer can fix height/width of cell. But you can try any of the following ways:
2.Overriding the Box > Bkgd setting from the embedded container layouts to height=82% in the skin rule.
Can you specify the version of Pega Platform that you are using?