Steps to reproduce

1. in about:config set "extensions.allowPrivateBrowsingByDefault" to true
2. install extension with "incognito": "not_allowed" in their manifest,
   e.g. https://addons.mozilla.org/addon/temporary-containers/

Problem:
Extension is not installed with extension file corrupted error message. If extension was already installed prior changing "allowPrivateBrowsingByDefault" flag it will be removed.

Expected:
Extension installed and working properly in not-private mode.

Because this bug's Severity has not been changed from the default since it was filed, and it's Priority is -- (Backlog,) indicating it has has not been previously triaged, the bug's Severity is being updated to -- (default, untriaged.)

Global JS console (Ctrl-Shift-J) shows the following error:

1597407285103 addons.xpi WARN Download of https://addons.mozilla.org/firefox/downloads/file/3623550/temporary_containers-1.9.1-fx.xpi?src=dp-btn-primary failed: Error: manifest.incognito set to "not_allowed" is currently unvailable for use.(resource://gre/modules/Extension.jsm:867:13) JS Stack trace: parseManifest@Extension.jsm:867:13

caused by https://searchfox.org/mozilla-central/rev/358cef5d1a87172f23b15e1a705d6f278db4cdad/toolkit/components/extensions/Extension.jsm#892-900

The severity field is not set for this bug.
:mixedpuppy, could you have a look please?

For more information, please visit auto_nag documentation.

This is expected behavior as the pref was meant to return to prior behavior we had. Duping to bug 1661517