The current dropdown design
(1) does not really save any space
(2) required extra clicks for same thing. very annoying if you switch back and forth between Chat and Contacts on the Contacts hub
(3) Has hidden the existence of the non-Default option from users. I have colleagues that were unaware of the other option because it isn't visible,.

Can we just get the two horizontally presented "buttons"/"tabs" along top of the Chat hub like we previously had?

Much less friction and more discoverable.