Overall we always wanted to do more with that "Contacts" menu than what it is right now.

Showing Contacts alone is just not very useful – especially sorted alphabetically, where you see the same people starting with "A" all the time.
It should not be limited to "Contacts", but also include Talk conversations as well and also users on the instance.
Basically it should be a "People" menu. And it could be sorted by most recent interaction, e.g. who you last communicated with via Talk / who last sent you a message, or who you last shared with / last shared with you. It would basically be like:
Name of person
Subline with last interaction, like Talk message, or file share
(And of course their avatar on the left as now :)
For example for Talk messages:
Alex Lastname
💬 Yeah that would be cool!
For Files sharing:
Sam Lastname
📁 shared document.pdf
For Mail:
Blake Lastname
💌 Re: Party planning
And so on. :) What do you think @dk1a @skjnldsv?
Seems interesting to me, I assume I should finish the baseline #22274 first
Yes, it's for a future enhancement. Let's move to vue first @dk1a :)
Don't feel pressured into it :hugs:
Basically it should be a "People" menu. And it could be sorted by most recent interaction, e.g. who you last communicated with via Talk / who last sent you a message, or who you last shared with / last shared with you.
Sounds very similar to the menu icon implementation of Discourse, the software at help.nextcloud.com
_In Nextcloud_

Notifications / Contacts / User Icon
_In Discourse_

User Icon
(clicking it) sub-displays links to Notifications / Activity / Private Messages in addition to recent interactions
Recent interactions is similar to combining Notifications & Contacts (sorted by those who have interacted with you), plus some combined parts of Activity as well. It serves as a "What have I missed" button for any messages, mentions or replies to your user.

I do like that these recent interactions are defined by icons in Discourse. Further examples, similar to @jancborchardt above, could be reflective of a specific Nextcloud app or a feature within an app... see this request for additional Talk notifications in Activity Stream.
Here is my rough example for Nextcloud...
User Icon (_assuming not administrative_)
Clicking it... Notifications / Contacts / Recent Activity
Rebecca invited you to a conversation about abc.png.
Morgan Docking Map is Past Due.
Joe mentioned you in a Conversation about final.mp4.
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Seems interesting to me, I assume I should finish the baseline #22274 first