It's a visible glitch but I wouldn't really say it's a show-stopper? Marking as P2. I may be able to fix it through other work on these animations but it's likely this will be in M-71.

Bulk moving all M-71 <P-1's to M-72.

Bulk moving <p-1's to the next milestone because we branched to M-73.

Sébastien, how should we address this? How should things behave in this case? In particular around when corners should remain rounded or square at various stages of this animation / drag process.

This is linked to bug 899289 I believe.
Because we did not show the shelf all the time at the time this bug was filed,
I believe that in the video when user drags the launcher, the full opaque shelf just disappears automatically. What should happen is:

-> User drags launcher
-> As long as Launcher top edge is positioned <=  112px (double shelf height), shelf corners morph to rounded (if possible), shelf remains opaque
-> When launcher passes the 112px threshold, we decrease opacity linearly so that the coloring layer of the shelf is set to 20% opacity once the launcher reaches 284px (peeking launcher height).

So in this case, if the user drags the launcher down passed the 112px threshold, the launcher will be 100% again, not holes will be visible.

Let me know if that makes sense. If not, I'll create a motion spec.