I'm starting to see what is going on here...
First issue is that you have to go to Facebook.com > Home > Events > (gear) > Settings > UNCHECK both the "hide" options ('suggested' and 'declined')
Then go through your calendar and start cleaning out the crap there by clicking the little X that appears to the right when you hover over the event. This purges it completely. "DECLINE" may as well, but I didn't experiment with that since why do I even want to see them if I'm not going. It's just cruft.
Note that it may take a few refreshes of the page to get rid of all the suggested ones as they seem to spawn like rabbits with different events. Gee thanks FB for being so "helpful". *sigh*
Then in the Calendar app, 'sync'. And it should look closer to what you expect.
I notice that it seems to SHOW events that you have NOT done anything with (and there's no way to turn that off unfortunately). Meaning, you were invited to but haven't chosen if you're going or not. Conversely, the interesting thing is that it does NOT show events you said "MAYBE" or "DECLINED". Personally I wish it would do the opposite of this. I'd rather not see clutter of events I don't care about. I have to manage them from FB anyways. I also wish it would show me the "MAYBE" events so that should my plans change on that day, I would be reminded of that alternate thing to do. Not very intuitive if you ask me.
BIRTHDAYS seem to be still broken and it appears it is a Facebook API problem even though I can't find any pages to support this theory. I THINK it has to do with birthdays that do NOT have a YEAR associated with them if you view "About" on a Contact (in facebook.com). These ones still don't show up sadly. Although, referencing my first post about my birthday, I can clearly see the year is set for one of my friends and yet she is still not showing up on our birthday date. This also means that there is no fix that I can suggest like the jenky events above (yet). I think there is some hacky trick where you could export birthdays to a FB URL that Google Calendar can stream, but then you would have duplicate birthdays for all the "working" ones.
I should mention again that this is a sync issue on both the stock calendar and also the "business calendar" app I downloaded, meaning it is a low-level sync issue at the core of the phone or FB API sync code, NOT an app/calendar issue. Although confusingly my 3 year old HTC Evo 4G DOES in fact show SOME of the birthdays that don't have years associated with them (and of course the same issue on my actual birthday date where people are missing that have both years and no years) -- soooooo I really don't know WTF is going on because it's not consistent?!
All I know is shit is broken and someone needs to fix it. This is stupid.