The original point of the Detached Display was to make me (and gpvillamil and a few others) happy with MC12, so that we could use the main MC GUI on one monitor (typically the laptop's screen) and the "display" on another monitor (typically the projector or external monitor/TV). For this, since I have controls available through the primary GUI, I'd rather not have and do not need the controls in the Detached Display.
You used to be able to accomplish this in MC11 via the Display Options you posted the screenshot of, but since MC12 was changed to use the unified display motif, then this was no longer possible.
The "Display View" provides the "embedded controls" you're looking for. If you don't like them, then the Detached Display provides this functionality instead (MC remembers the Detached Display's position and "size", including Full Screen status, on a per-zone basis). Unless you for some reason need both the full MC GUI on one display, and the embedded controls inside the Full Screen display, at the same time, then I don't see why the current system isn't flexible enough for you. As Alex pointed out, the "Display View" isn't always full screen, you can resize it.
As far as the resizing -- I agree, sorta. I like the resizing personally (I asked for it actually). I don't like the controls to cover up any part of the video, which is more distracting to me than the resize. However, when I asked for it, I asked for an option because I knew there would be people who wouldn't like it. Instead, they just changed it (and there was no major outcry way back then).
One thing I really would like to see (and have asked for repeatedly) is some way to pull up those controls in Display View via an Automation command or a keypress, so that I could pull it up via my remote (and not have to reach for the mouse for those circumstances when I want to see it for some reason). This is a feature that basically every set-top box has for the on-screen "info" display, and it annoys me that in MC I have to reach for the mouse to get it to appear.