I put back again the older ones and saw the sidebar big like before, this time tho it let me shrink it to the normal size so I restarted it after shrinking the sidebar and its now working perfectly.
So I exit and made backups of the newer settings.dat file thinking I could test to see if my old settings would work correctly. I then upgraded to 3.4.1 (since you say that the bundles bug is only fixed on the beta builds of 3.4.2) then I ran it once and saw it was fixed. I first made backups (obviously) of the original settings.dat and then deleted them and made an empty settings.dat file and configured all settings back to what they were before. I had to revert to 2.2.1 first to fix it because it wouldn't fix it when I followed your instructions to empty setting.dat even tried reverting to 3.4.1 to see if it would change anything but it didn't, so I tried on 2.2.1 as a last resort and it worked. I've managed to fix the bigger sidebar problem without losing any settings.