Navigation module makes use of Layout Builder to construct the navigation toolbar.
There have been some questions about this decision in Slack. This post discusses the background.
In #3397058: Convert navigation sections to blocks and use the menu system the navigation module added a plugin system and config entity for 'navigation blocks'. These were very nearly identical to block plugins and block config entities. The primary difference was the config entities did not depend on a theme like block config entities do.
In #3411099: Create an administration UI for managing Navigation Blocks a UI was added for editing and managing navigation blocks. This duplicated further code from the block module.
#3438895: Add the new Navigation to core as an Experimental module was the issue to add the navigation module to core. This point was the first time that many core committers had looked at the code. As part of a Framework Manager review of the issue, the amount of duplication between the block and navigation modules was raised.
Until this point the navigation module lived in contrib and did not have a chance to change code in core. But now that it was a merge request against core, changing core was a possibility. As a result the Framework Managers made an attempt to modify the theme-assumption in the block system to support the navigation use-case. This resulted in a less than ideal scenario where Block::getTheme() could return null or an empty string in some scenarios. Whilst it was possible to fix all calls in core, the impact this could have on contrib and custom code felt like it would be problematic.
At this point the idea of using Layout Builder's section storage as a data-model for the blocks in navigation was floated. Layout Builder's section storage provides a data-model that allows placing and configuring block plugins but without block config entities. There is no dependency between these block placements and a theme. Layout Builder also includes an API for limiting which blocks can be used where, which was also a requirement for the navigation module. Not all block plugins would work inside the navigation toolbar.
The Framework Managers worked on the core merge request to assess the feasibility of this change. The net result was the removal of 4,000 lines of code but with largely the same functionality. As a result, the version of the navigation module that was committed to Drupal 10.3.0 and 11.x depends on the Layout Builder module.
Sites who don't use Layout Builder for building entity displays can continue to use their preferred approach. Having Layout Builder enabled doesn't change how entities are rendered unless you enable it on a per entity-bundle-display basis. Prior to 10.3 there were performance issues from the number of block plugins derived by Layout Builder. But from 10.3 sites can now control and prevent this.
The Navigation initiative has created a list of follow-up issues for the usability of Layout Builder when configuring the navigation toolbar. Some of these overlap with existing usability issues for Layout Builder. In addition the recently announced Experience builder initiative will invest in improving Layout Builder usability. Finally, the Dashboard initiative is also using Layout Builder for handling block placements. When we standardise on a solution and work together to improve it, it will lead to improvement across the board.