I had a long discussion with a GM about ESO not being "true" full screen mode and wanted to pass along his response. Here's the details so those know a possible fix is coming:
"Thank you for the pictures, it truly allow me to understand where you were coming from. The full-screen mode working as intended, you are correct this is not true full-screen mode. As of right now there no changes or fix for this. Please keep checking after updates or the FAQ's to see if a true full screen mode available."
It is most likely this will not be resolved any time. Not sure why they went this route, quite disappointing - but there's your answer.