I'm pretty sure that button isn't a dropdown menu, it just toggles showing other buttons next to it if they're hidden. If you make your browser window really narrow when viewing a list of posts (narrow enough it goes to the mobile view), you can see pressing that button toggles showing the block and report buttons, which would normally show up. So I don't think you're missing anything, I think it just doesn't hide the button when it does nothing.
On an instance running 0.18.0 it's actually a dropdown, and it just shows those two buttons in it.
