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For some reason my toolbar is appearing way at the top of the page and I have no idea why this is happening. The last time it happened it was because I stopped inheriting permissions from the parent site. After re-inheriting permissions the toolbar appeared normal. This time it is happening again and all permissions are correct so I have no clue what is causing it to jump up

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Create a new sub site and stopped inheriting permissions from the parent site to check if it works.

And check if you have SPFx applications customiser to inject some CSS code to override the default CSS style.

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Looks like this got fixed by itself after SharePoint Online went down last week. This was affecting our entire tenant and even our tenant Admins had no clue what was causing it so this was probably a temporary SharePoint Online issue.

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