I don't find it that obtrusive and it's likely it would have taken me a while to notice it if it wasn't pointed out in this version and in 76 threads.

When I click it I also get the address bar drop-down with other common addresses in it, which is many many times larger than the small expansion of the address bar - unless I am missing the gripe here.

I don't know why it was needed to expand like that, but it certainly doesn't seem like an egregious use of space to me.