It is a server install with IIRC the ubuntu-desktop package.
So I think it is Wayland - certainly rather different from the previous 
versions.

I can also confirm that setting PS1 to "$ " stops the size change.
So it is related to the title updates being done by the shell every time it 
sees SIGWINCH and then redisplays the prompt.

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https://bugs.launchpad.net/bugs/1731489

Title:
  Extending a gnome terminal window to the right increases its height

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