This new Megabar, when enlarged, overlaps parts of my bookmark bar (right below the URL bar) and makes clicking on links more difficult.

Bug 1585912 is set to WONTFIX which suggests it will not be possible to disable the Megabar entirely. So there needs to be a different solution.

I don't think we want to go further on this fix, the overlap is minimal, 2px, that is pretty much all padding, we didn't notice an increased difficulty with clicking bookmarks.