The block toolbar covers the top block content, instead of sitting above it. This is not an issue in WP core or the gutenberg plugin that I can replicate outside of the Playground.

This seems to only happen on the Playground with WordPress 6.4.x or any earlier version if Gutenberg is enabled.

If I hide the Toolbar across the top, it fixes the positioning.

6.4.2:

6.3+Gutenberg

With the toolbar hidden