This is an issue caused by incompatibility of the default Ambiance theme with the Nautilus version.
GNOME developers love to break this and that between GTK releases. Since Ubuntu 16.04 is shipped with mostly GTK 3.18 components including nautilus, updating the nautilus and GTK with break the compatibility of those applications with default Ambiance theme.
You need to downgrade to default nautilus and GTK. I think you've added gnome3-staging PPA.
So, remove it with this command
sudo ppa-purge ppa:gnome3-team/gnome3-staging
If you prefer to stay with GTK 3.20 in 16.04, You have to find themes that work well with GTK-3.20.
The list of themes that supports GNOME 3.20 is few. Here is a list
If you want to use default Ambiance theme:
If you really want to use the Ambiance and Radiance theme, you can download the light-themes package from Yakkety release and install it in 16.04. It works fine in my test.