I noticed when creating a fresh site block appender button looks cleaner than my other site. This is a fresh site:
This is my other site (big rectangle button):
I disabled all plugins and switched theme to twenty-twenty to test. Still looks wrong:
I made sure no plugins are active, no mu-plugins, no additional CSS, and switched to twenty-twenty-three. When I create post, it still looks like the rectangle button. Am I missing something that would make it look like that?