Thanks for the feedback! In this iteration, we think recovering more space helps users focus on content, and allows them to see more content at once. Definitely we recognize the tradeoff of additional clicks and discoverability as a result.
We are definitely focused on usability, and navigation in general. We don't claim to know all the right answers all the time. So we are iterating with each release, and working hard doing user research as well to inform our decisions. You can see some of our recent work regarding nav here: https://gitlab.com/gitlab-org/ux-research/issues/3. Thanks.