I just discovered a solution myself...
Looks like there is a "Hide Toolbar" function which has the effect described above. Right clicking on the toolbar and deselectig "hide toolbar" fixes the issue. I thought I'd share this solution for all those who have the same issues.
Go to Finder "Go" menu hold the option key and choose Library. Then go to Preferences trash these files:
Then, restart, or log out and in again.
(You will have to reset a few finder prefs the way you like them.)
Looks like there is a "Hide Toolbar" function which has the effect described above.
Yup, that'll do it!