Go ahead, I would not put it back on either.

Thanks yayagal, but i'd be really interested in knowing if there is any design theory to back that up? The walls aren't in the best condition so it'd actually be easier to put it back than leave it off to cover all the nail holes.

IMO that is small space so where exctly is the picture rail in your home? As for the damaged wall geet it repared and IMO no picture rail Waht are you using the space for ? Ithink that might drive the choice.I am not a big make it look orignal person. IMO we no longer live in Victorain times and certainn things just do not fit our lives now. For instance I sure do not want a Victorian original bathroom

From an artist's vision, any thing that crosses sideways will make the eye see the two small up and down parts. Just put a loose belt on a dress and it does the same thing.

It means the solid wall without the rails would look bigger and the rails would make it appear smaller. I'm an artist and you can look at any work of art and see the criss cross mistakes.

@Yayagal, so does this mean it makes it look bigger or smaller please?

Rails make the room look SMALLER.

How high are the ceilings and how far down was the picture rail. I don’t think it necessarily makes a room feel smaller. It can be a nice feature and when it comes down to it, size/amount of furniture has more of an effect on the room‘s size impression. Should also suit your decor and style and I’d base decision on these multiple factors.

If the ceiling is high enough that the room starts to look square, it may look a little wider with a picture rail that visually lowers the ceiling

In a modern house, with some of the rooms having toaster slot proportions, again, it may also look a little wider and less tower-like if the walls do not seem so tall.

I don't know that it makes the rooms look Bigger without it, but the walls may seem a little wider if there is a horizontal rectangular element introduced. It's not quite the same as a belt on clothing, because that would tend to cut things in Half, and thats not what is happening here.

I live in a 1914 Craftsman bungalow, and feel lucky to have picture rails in many rooms- I use them to hang pictures (go figure); frankly, I wish I had a picture rail in every room of my home. Even the bathroom :)

If the walls are still lath and plaster and you don’t plan on changing that then you might need the picture rails to actually hang pictures. I had that in my last home which was a 1920s home. I used wire and hooks to hang every single picture. Designers on this site would probably recoil from the thought of doing that. But with plaster you really open up a can of worms if you start nailing things into the wall. In my last home, it actually looked kind of cool. Like a gallery. That being said, since you’ve already damaged the wall behind the picture rail, if it is plaster you’ll probably have to repair it anyway to make sure it doesn’t spread. Those are just my experiences dealing with that age of home. If you do end up, keeping the picture rail, having it be the same color as the walls might help with the closed off feeling.