Why does hiding the Finder toolbar cause so many side effects?
As to your second question of "why does the Finder behave this way?", I will hazard a guess that it mimics the decades-long traditional behavior of Finder windows.  This was how Finder windows worked in Mac OS through version 9.



In earlier versions of OS X, there was a button in the top right corner of windows that toggled between the "old" Finder window behavior and the "new" (toolbar) behavior. 



The button was removed in Mac OS X 10.7 Lion, but you get the same results by hiding the toolbar.