"It goes full-screen - isn't that an expected outcome?"
Not exactly ...
First of all, for most of the life of OSX, clicking the green dot caused the window to resize larger, but not occupy full screen, by some measure I could never discern. That was always braindead.
Second of all, while the current behavior that I see (expand to literally full screen) is sort of an improvement (that is, at least it makes some sense) it's still badly behaved because bringing a window to literally full screen blanks out my other monitors (!@#) ... and now we're drifting into OSX treatment of multi-monitors which is another few layers of hell.
FWIW, IMO, the correct behavior is to maximize the window in the workspace - which is almost identical, but not quite, to the literal screen.