This has been fully resolved as of the version of Icon Composer included with Xcode 27, which can be freely resized down to a very very compact minimum window size like many other traditional Mac OS X apps.

It's been improved significantly in the latest Xcode 26 beta it seems, it’s perfectly usable and well-sized on 900p modes and even at 1280x800 fits entirely on-screen albeit barely, as it does occlude the dock still. It would be perfect if the minimum vertical height could be shrunken even a tad bit more, by say 64pt, then it’d be usable on all reasonable Mac video modes.

Any thoughts/updates on this from an Apple engineer working on Xcode & Icon Composer would be appreciated.

The issue appears to be improved or even entirely resolved by macOS 15.4 Beta 1 based on my own testing in various affected apps (Settings primarily) on my M2 MacBook Air.

The feedback I filed for this issue (which I made sure included a direct link to this thread and it's information) was recently marked as "Potential fix identified - For a future OS update" so hopefully Apple ships said fix in one of the upcoming 15.2 beta builds. FB ID is FB15241636.

Is this, per-chance, the very reason that scrolling is laggy in System Settings, Tips and Notification Centre in macOS Sequoia then? (All seem to be SwiftUI afaik and all of them had buttery smooth scrolling in macOS 14).