Thank you for the suggestion! We are aware iFrame comes with its limitation and will look into an improved no-code experience.
For the time being, it will require custom code on your website for a collapse/expand chat window experience.
I was able to get working but needs a but of tidying up. If you use the code there but alter this div, you can get your chat to work in the popup (correct the guid for your bot also)
<div class="chat-popup" id="myForm">
<iframe src="https://powerva.microsoft.com/webchat/bots/aaaaaaaa-aaaa-aaaa-aaaa-aaaaaaaaaaaa" frameborder="1" width="300px" height="350px" onresize="this.style.height=this.contentDocument.body.scrollHeight +'px';" target="assets">
</iframe><br> <form class="form-container">
<button type="button" class="btn cancel" onclick="closeForm()">Close</button>
The rest of the code is default from the link. I think the bottom line is that the bot can be embedded in many ways as you see fit.