Here is screenshot explaining what I described in the bug report above,
I hope it is more clear now.

** Attachment added: "Screenshot of the problem"
   
https://bugs.launchpad.net/ubuntu/+source/nautilus/+bug/980625/+attachment/3061255/+files/Screenshot.png

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https://bugs.launchpad.net/bugs/980625

Title:
  Missing compact icon layout option in Nautilus

Status in “nautilus” package in Ubuntu:
  Incomplete

Bug description:
  Compact icon layout feature was removed in Nautilus 3+. As I
  understand it's design decision, but there is a problem that it causes
  if you want to have launchers/icons on desktop. It is not possible to
  apply compact view or any similar feature which delivers the effect
  close to original compact layout. This makes nautilus nearly useless
  file manager for handling the desktop, because launcher/icon labels
  are wasting too much space and often collide with other
  launchers/icons sitting next on the desktop.

  I hope there are still people who use desktop for something more than
  place for a wallpaper. It seems to be the trend with "modern" Linux
  DEs - maybe because it looks better on screenshots. But it is actually
  completely useless for work and I don't know why a file manager needs
  to be used for handling a desktop, which can properly show only a
  wallpaper anyway.

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