This is the TiniMCE editor indicator, it shows your current innerHTML in editor. This is not bug nor unnecessary thing. And we don't have any reason to remove this. If you are familiar with WordPress Post editor you should know what is this. here is a screenshot of WordPress post/page editor in dashboard:

Haha !  Thanks for sharing your screenshot, I see what it is now.  

There are quite a few UI suggestions for you in the screenshot you provided.

Any line between the editing window and the floating p would make the UI look more like your screenshot.

To me, the larger than needed blank space below the p would tidy things up as well.

Posted by: taztest

Any line between the editing window and the floating p would make the UI look more like your screenshot.

I find the floating letters very quirky.  the lack of distinction between a cursor status area and the text box to type in is weird. 

Ok, we'll add some separator line.

Posted by: Robert

Ok, we'll add some separator line.

I dont see it.

I do see a separator line in the Wordpress screenshot.