What does the spec say? Where should it appear?

Not on top of the item below the status card. :) We should make space (like we currently do, normally).

You can even see it in the video. We animate making space for the spinner by moving the signin promo down, but when it appears and disappears quickly, we sometimes draw over it. 

But in a normal use case (that itself involves repeatedly dismissing cards to the point where you run out of suggestions) the animation works properly.

Closing it as won't fix. It's very subtle and quite a corner case. Also trying to fix this would likely involve ugly hacks.