Coffee Space 
I came across a new VLC bug recently that appears to not yet be documented anywhere, so the intention is to put the temporary fix here so that people may solve their problem.
You have to windows, one with the VLC controls in and one with the video being rendered. For me this occurs randomly and is not due to some button being pressed.
NOTE: Both of these windows are displayed separately when this bug presents itself.
Checking out the settings, there is no way to bring these windows back together. A check online didn’t show up any solutions either.
I believe the issue is that for some reason the settings are becoming corrupted. VLC then defaults to this mode for displaying (which is apparently the default).
Select Tools > Preferences in the VLC decorated window, then click Reset Preferenecs.
You will then need to restart VLC to see the render window correctly placed inside the control window. You may find that the same video triggers the same behaviour to occur again, so you may need to open a different video in order to confirm the reset.
Update (2022-09-05): I have also experienced this triggered when the main disk is out of space. In this case, it was required to close VLC and delete the configuration files in ~/.config/vlc/. This is likely because the configuration files got corrupted during a previous save.
Update (2022-09-06): After resetting the configuration, on Ubuntu 22.10 running on X server, it was required set the output mode. This can be done using: Tools > Preferences, then in the Video tab select the output as “X11 video output (XCB)”.