We are adding a half bath to our main floor in an area that was previously an unused patio door. There is a bathroom upstairs, so it is convenient for plumbing. The available space is 7.5' W by 4'8" D (finished size). All plumbing is in the exterior wall - toilet is closest to the dining room and sink closest to the family room. Our plan was to use the whole space and put the door into the hallway (pink shaded area), but that gives it direct view to and from the breakfast room (the lines in the picture are only 2 steps, no walls or banisters) (the orange shade was another option that has been eliminated based on the helpful suggestions from this site!)

Based on feedback and research, we are very worried about having the door be so open to the public areas. So, we are thinking of changing the design to add a small hallway for the door - this would make the hallway 36" wide and the bathroom 4' W x 4'8" D, which is much smaller than planned. We have already begun the original design, so changing now would add time and money - so my question is: do you think that the benefit of adding separation to the door worth the trade-offs? Thank you so much for your help!