Description

When in template editing mode, the blocks added at the top of the editor are "smushed" together collapsing the toolbar settings with the block content making it hard to use.

Step-by-step reproduction instructions

1. Set up a site with FSE capabilities
2. Add a new post > edit the template it's using
3. Once in template editing mode, try to manipulate/add blocks at the very top of the editor
4. See problem :)

Expected behaviour

Expect to be able to see both the toolbar and the content of the block.

Actual behaviour

It's very hard to try to editor or see the content of the blocks being added. Everything is smushed :)

Screenshots or screen recording (optional)

WordPress information

• WordPress version: 5.7.1
• Gutenberg version: 10.6 RC
• Are all plugins except Gutenberg deactivated? Yes
• Are you using a default theme (e.g. Twenty Twenty-One)? TT1 Blocks

Device information

• Device: Desktop
• Operating system: MacOS
• Browser: Chrome