The issue is that WTC doesn't position the LocationBar correctly.

This seems to be broken by the changes in WTC related to expansion animations.
The issue is not reproducible when the property animator flag is on (or when the new toolbar flag is on). 
Please note that this is an M64 RBS, so the old animation code needs to be fixed. 

I briefly started to take a look at this yesterday night.
I couldn't repro on 64.0.3254.0 dev. I also realized that the Omnibox expands to position itself underneath the WTC (this happens on iPad) so the WTC containment is not a sure thing.
I also checked that the new animation code didn't make any changes besides adding code behind flags. (Though maybe a follow up CL could've change something).

stk@ are you going to continue working on this? Do you think is omnibox related?

sczs@ please follow along here: 792503

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/f2dfa460b70841647d1b5dcb7700fd0fd614737c

commit f2dfa460b70841647d1b5dcb7700fd0fd614737c
Author: stkhapugin@chromium.org <stkhapugin@chromium.org>
Date: Fri Dec 08 15:30:21 2017

Set target location bar view frame to trigger autolayout.

Set the view frame in addition to animating view's layer bounds because
just changing layer bounds doesn't allow autolayout inside LBV to
trigger.
Note that after [_locationBarView layer].bounds = toBounds; the
LBV's frame will become LayoutRectGetRect(toLayout) anyway, but the
since the setter is not called, autolayout seems to be confused.
Also note that this is not necessary in new toolbar.

Bug:  792503 ,  789471 , 788814
Cq-Include-Trybots: master.tryserver.chromium.mac:ios-simulator-cronet;master.tryserver.chromium.mac:ios-simulator-full-configs
Change-Id: If3ccac317bb8d850f71275ee32c7b82d38f6af24
Reviewed-on: https://chromium-review.googlesource.com/813973
Reviewed-by: Justin Cohen <justincohen@chromium.org>
Commit-Queue: Stepan Khapugin <stkhapugin@chromium.org>
Cr-Commit-Position: refs/heads/master@{#522784}
[modify] https://crrev.com/f2dfa460b70841647d1b5dcb7700fd0fd614737c/ios/chrome/browser/ui/toolbar/web_toolbar_controller.mm

Verified on M65.0.3292.0 Canary on iPhone X iOS 11.1, iPhone 7+ iOS 10.3.3, iPad Pro 12'5 iOS 11.2 in Incognito tab.

Thanks vbhatsoori@! Requesting cherry-pick to M64. 

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/843d606a97a222a5ff7556fffb9a1f3eeeab5ca2

commit 843d606a97a222a5ff7556fffb9a1f3eeeab5ca2
Author: stkhapugin@chromium.org <stkhapugin@chromium.org>
Date: Mon Dec 18 15:07:14 2017

Set target location bar view frame to trigger autolayout.

Set the view frame in addition to animating view's layer bounds because
just changing layer bounds doesn't allow autolayout inside LBV to
trigger.
Note that after [_locationBarView layer].bounds = toBounds; the
LBV's frame will become LayoutRectGetRect(toLayout) anyway, but the
since the setter is not called, autolayout seems to be confused.
Also note that this is not necessary in new toolbar.

Bug:  792503 ,  789471 , 788814
Cq-Include-Trybots: master.tryserver.chromium.mac:ios-simulator-cronet;master.tryserver.chromium.mac:ios-simulator-full-configs
Change-Id: If3ccac317bb8d850f71275ee32c7b82d38f6af24
Reviewed-on: https://chromium-review.googlesource.com/813973
Reviewed-by: Justin Cohen <justincohen@chromium.org>
Commit-Queue: Stepan Khapugin <stkhapugin@chromium.org>
Cr-Original-Commit-Position: refs/heads/master@{#522784}(cherry picked from commit f2dfa460b70841647d1b5dcb7700fd0fd614737c)
Reviewed-on: https://chromium-review.googlesource.com/832646
Reviewed-by: Stepan Khapugin <stkhapugin@chromium.org>
Cr-Commit-Position: refs/branch-heads/3282@{#262}
Cr-Branched-From: 5fdc0fab22ce7efd32532ee989b223fa12f8171e-refs/heads/master@{#520840}
[modify] https://crrev.com/843d606a97a222a5ff7556fffb9a1f3eeeab5ca2/ios/chrome/browser/ui/toolbar/web_toolbar_controller.mm

Verified in:

App Version: 64.0.3282.41 beta
Devices: iPhone 6S Plus, iPhone 8 Plus
iOS Versions: 10.3.3, 11.2.5 beta 2

Clear Omnibox button is not overlapping with the Close button in Omnibox. Issue is fixed.