The screen shot at the bottom of the post is an i3 window manager with title bar hidden. Did not knew titlebar can be hidden in i3 window manager. Its 2 line configuration https://gist.github.com/lirenlin/9892945.
# window borders
for_window [class="^.*"] border pixel 1
default_border pixel 1
Apparently new_window is deprecated. Not quite sure why it acts like this, but it's nice to reclaim those extra pixels, especially since Waybar displays the window title anyway.