This happens very often, and although I'm not sure about the specific reason for this, it seems that the wrong density has been detected for this, and resources for a lower dpi are loaded inside the emulator with a higher resolution. That's why everything is smaller, but the layout works correctly and aligns things in their places. And you are right: when this happens, the network does not work in the emulator! These two things seem to be unrelated, but I assume that the emulator will not be able to successfully load the configuration for the current virtual machine and includes density and network capabilities.
In any case, apparently, no official information on this issue and similar reports in the Android developers list received any response for Android developers, although this is a very popular mistake.
And the solution right now only restarts the emulator. Sometimes you have to do this more than once, but in the end, it works.