That is how window resizing on iOS 27 apps streamed to macOS 27 works right now in the first beta, I reckon it won't change.
Wow seriously? To me it looks like a throwback to Windows 95 lightweight settings or some lightweight WM of the early 2000s like Fluxbox/OpenBox which didn't implement proper resizing to save on resources.
It gives me a headache. How could anyone look at it and think it doesn't need to change?