Hey @digitalink, yes managed to sort it! After aaaages trying to find a solution on Squarespace forum I came across this post which expressed the same problem.
@Ziggy shared the below solution which worked for me...
Try adding this to your Custom CSS, hoping it will hide the embed warning message and should allow you to shrink the block so you don't have to leave it overlapping the text block:
html.squarespace-damask .sqs-blockStatus {
display: none !important;
}
Hope it works for you too!