That genuinely makes me really, really sad to hear. It seems this design decision was not made intentionally, but as a stepping stone to implement another feature. I don’t understand how this is not a regression in your eyes.
Just earlier this year, @Vlad was turning down feature requests to increase the height of the URL bar, citing “preserving screen real estate” as the main reason: https://orionfeedback.org/d/7151-a-more-safari-like-design-for-iphone
Seems preserving screen real estate is suddenly not a priority. It doesn’t make me feel good as a user that you could, for example, remove grid view tomorrow because it didn’t work with the dynamic island and tell me to file a suggestion to bring it back.