What problem does this address?

Distraction free mode ⌘ + shift + \ should be an easy way to hide all of the UI, look at your content without distraction, then pop back into editing it. It does the first part of that, but not the second. Ideally it should return you to the state of your UI before you entered distraction free mode. The paradigm here is the Figma ⌘ + \ command, or the equivalent from Adobe (shift + tab??)

Currently (WP 6.5-RC1), the command closes all of your sidebars but does not reopen any of them.
In WP 6.4, the command at least reopened any sidebar plugin (though never the list view, even if "Always open list view" is enabled).
In this case - 6.5 will actually be a regression in functionality.

What is your proposed solution?

When exiting Distraction Free mode, you should be given exactly the same open panels as before.

1. A future release should revert the change in 6.5 (this may already be the case in Gutenberg).
2. Then, it should be expanded to include the left-hand side of the screen: the list view and block inserter. If list view was open then it should reopen.

Then it could be used the same way it is in other tools like Adobe or Figma- a way to quickly hide all the UI and focus on content, then bring the UI back and immediately pick up where you left off.

Related: #53012

Note that this references Mac keyboard shortcuts, but should apply to any OS.