Yes! You are one hundred percent correct.
My concern is absolutely about setting the application to my preference. This is important. I have no need to see the sidebar shortcuts most of the time. When not needed, it is wasted space.
While I genuinely like the minimalist approach to ui design employed by nautilus, and gnome more generally, I think it has been taken too far. End users do have preferences, most of which are fairly simply and obvious.
Your reply implies that hiding the sidebar is only useful in the case of a window being too narrow to display it. There are other use cases!
Side-by-side viewing. Compare the contents of two directories by opening two instances and placing them beside one another. (Nautilus used to have a feature that allowed this within a singe instance, Nemo still does.) Are two sidebars needed, or are they a distraction from the task being performed?
I’m sure I could think of other use cases as well, but my point is that the feature to hide the sidebar at will is not only a matter of preference, but also genuinely useful.