Even though the space for the small labels is there the whole time, I think this approach is better than having the small labels visible the entire time. Consid

Even though the space for the small labels is there the whole time, I think this approach is better than having the small labels visible the entire time. Consider if the labels were tiny and always visible: the form would contain very tiny text and odd spaces where the existing placeholder should be. Gray placeholder text also provides the needed contrast with the black user-entered text, so as not to confuse the two types of large text. The animation is very clean as well.