Thanks for sharing the screenshots, 108! I understand your concern, however Windows 11 currently offers no built-in setting or registry key to shrink that activation zone.
There's a workaround but that involves turning off “Automatically hide the taskbar” which will permanently show it.
So it’s a design limitation (intentional behavior) in Windows 11, not a bug. Though it clearly causes usability issues in certain apps.
I suggest that you provide a feedback, you can press Win + F → submit feedback:
“Auto-hide taskbar activation zone too large — overlaps app UI when maximized.”
Share it or find similar feedbacks and upvote them, which may help trigger developers to provide a fix in future updates.
Best regards,
Kimberly