You can sort of disable this monstrosity, but if you use any of the "features" of the URL bar, you're SOL.
The first flag does not exist, so you must create it.
about:config
browser.urlbar.disableExtendForTests
and tick Boolean > + to savebrowser.urlbar.maxRichResults
> adjust from 10
to 0
If you've previously opt out of their telemetry (like me) it may be time to reconsider. Mozilla does not listen to complaints from beta testers or daily users, perhaps they may listen to telemetry feedback if you allow them to capture technical data and they see these flags being used.
If you do decide to allow the technical data to be captured, be sure to un-tick the studies garbage, which re-enables itself when you re-activate the technical telemetry.
Mozilla has decided you no longer need the option to disable this eyesore, as of Firefox v77 you cannot disable this 'feature' via about:config.
Your options:
Does not work for v77+
If you want to disable the fat URL bar / pop out bar "feature" nobody asked for:
about:config
Find the following settings and adjust accordingly (double-click to toggle true/false if boolean is selected at the bottom):
browser.urlbar.openViewOnFocus
set to false
browser.urlbar.update1
set to false
browser.urlbar.update1.interventions
set to false
browser.urlbar.searchTips
set to false