Tested on: Vector & latest Chromium
After talking to engineers we decided to close this ticket for now.
If this should be reported again I would like to know, if there is the possibility of having the PopupButtonWidget behave in a way that it recognizes the original space being too small and instead changes position to a fitting spot.
I tried to reproduce this, but wasn't able to. The popup expands to the bottom if there is not enough space on the top.
If there is not enough space on either side, a scrollbar appears in the popup. To me this all feels as if it behaves like it should behave.