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This is one of the reasons why everyone says OmniFocus is too difficult to use. It's not because of feature bloat, it's because of silly defaults and inability to find the features :(

Thanks for the tip about "Expansion" - I had to go into "Show Perspectives" and tick it for every single perspective. The behaviour is still unpredictable, buggy and frankly broken though as resizing the contexts sidebar resets the width you set for the Projects and Inbox sidebars :/