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Yeah, it's a 'feature.' I think the idea was to give a sense of continuity between the two halves of the displayed page. See in Landscape mode, each screenful is only half a 'page' so the grayed out lines are kind of a cue as to whether you're on the top or bottom half.
After working with it some in the real world, I tend to agree with you two that I'd rather it just doubled the number of 'pages' and dropped the grayed out lines thing.
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