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You should be able to hold option and click the fullscreen traffic light to maximize, but I agree that it should be the other way around. It is rather ridiculous to take a user out of their interface if they forget to hold the option key.

The other major issue is that fullscreen actually renders my second monitor completely useless. It just fills up with grey. Why would anyone want that to happen? If I didn't want a second monitor I could turn it off.

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I think you can change the behavior of your second issue. In System Preferences -> Mission Control if 'Displays have separate Spaces' is checked then only the one monitor should go fullscreen leaving the other to use normally.. I have it unchecked for a specific reason, but I remember before unchecking it that fullscreen was per monitor, and now it treats all monitors as one basically. I'm too lazy to log out and back in to make sure I'm right though :), give it a shot

Thanks, I'll give it a try when I switch over to my Yosemite partition.

FWIW- This was introduced in Mavericks. Easily the best feature in my book :)

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