The new 'Compact' header layout in the Change the Look settings has a bug. On selection, the new layout applies, but after saving the header seems to return to the 'Standard' setting.
If you refresh the page, the new compact header should be in place.
While this is a work around, it really isn't acceptable that the new layout doesn't seem to apply on save. I'm aware that other tenants also have this issue. Please fix this bug.