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I've made something similar on a data editing UI back in 2011. But I found that showing the label only on field focus wasn't really suitable for UIs that contained multiple fields of similar data.

Like in the example below[1] there are two fields where you can enter coordinates data, but without a hint you wouldn't be able to distinguish where should one or the other go.

[1] http://www.pmura.com/media/af-ui-input-2011.png

In that screenshot, it would help if the toolkit showed the extent of the textboxes. Having the bare floating text in a sea of white provides minimal context.

Actually it does when you focus on an input. Having borders/backgrounds on every piece of text proved to be a bit messy in my case.

It would've been cooler if I could've capture the interaction, but I don't have access neither to the live webapp, neither do I have a deployed development version at hand :(.

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