Rotors rust while the car is parked outside. Ordinarily, the pads rub the rust off the next time the car is driven. But if it is parked for a long time, the rust can get thick and crusty enough that the rust eats into the pad instead of the other way around. As the pad is no longer flat, it doesn't touch the rotor in the rusty area and the rust expands.
A significant "ring of rust" will decrease braking performance and it is not OK to leave it.
A significant "ring of rust" will decrease braking performance and it is not OK to leave it.