Strangely, GP was trying to show a non-existant image as a retina image, even though I didn’t have a retina image set.
For this reason, I wasn’t seeing the header image on my retina macbook. I tried putting in a retina image that exists and that made the header image display again.
sounds like a possible browser caching issue – the updates were quite significant and Chrome in particular caches really hard.
The other aspect is we added some backwards compatibility, so if a user already had a Navigation Logo set then the option would not appear, as it would effectively lock them out from replacing the logo.
Looks like you already have a logo set in Customizer > Layout > Primary Navigation.
When this is the case the option doesn’t display as it could break the users layout. If you were to remove the nav logo then the option would display. Navigation as Header is simply a shortcut for creating what you have there. So i am not sure if / why you would want to change this.