The earlier version is better. Only show the purple private mode icon. Please keep the icon indicator, but please remove the "Private browsing" text.
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A solution was provided here: https://connect.mozilla.org/t5/discussions/private-window-changes-in-firefox-106-give-us-your-feedba...
if you dislike it saying private browsing in the corner, set browser.privatebrowsing.enable-new-indicator false
+1 for removing the text by default.
I think that the text does the job better than the mask icon for casual users.
Instead of reverting to the previous style, it would make more sense to add an option in settings to toggle browser.privatebrowsing.enable-new-indicator to false for the people that require it.
What @alxpl said.
As a heavy user for private browsing, I would love an obvious setting to make it shorter. It's taking too much space.
Personally, I think of a better idea: make an option to disguise the private windows as normal. For instance:
Private Spoof Mode disabled
Private Spoof Mode enabled