I upgraded to Sierra. Previously, when I had the dock hidden, windows could be resized to take up almost all of the screen; a 4 pixel margin was reserved for the dock. Now, when I have the dock hidden, the margin is no longer just 4 pixels: the margin is the size as the dock. I hid the dock to make extra space for my windows, but it seems like that benefit of hiding the dock is lost. Is there a way to revert to the previous behavior?
Sometimes, settings don't come into effect until you reboot your device, especially if it's a system-wide preference. Rebooting tends to solve most System Preferences-related issues.
Also, System Preferences may not tell you to reboot your device, but if something isn't working, restarting should solve your issue.
If Dock settings do not work correctly, a reboot should solve your problem.