Unfortunately there is a bug inside the RadOutlookBar and RadDropDownButton connected with this particular functionality. I've logged this issue in our PITS
under the name "DropDownButton: Drop down content does not respect the screen size"
and it will be available for tracking and voting tomorrow the latest. As a workaround, I'd suggest you give the TreeView a MaxHeight value which satisfies your scenario.
I've also updated your Telerik point accordingly. Let me know how it goes.
All the best,
the Telerik team
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