The Proton specs state that the extension pageActions should appear to the left (LTR) of the Reader Mode button.

Reader Mode isn't a pageAction so this could be a bit tricky. It does appear to be possible to convert the Reader Mode button to a pageAction but we'll want to be careful of any changes to behaviour this may cause.

This button can be moved to a pageAction which should let us place it next to the bookmark button. I made a small patch [1] to see if this would work, which could help point someone in the right direction for accomplishing this. It just creates a blank button that behaves like the reader mode button, so more work to do.

We should support both the proton and non-proton cases here, so the current Reader Mode button should be hidden with proton and this button should be hidden without proton (using the browser.proton.urlbar.enabled pref).

[1] https://gist.github.com/mstriemer/f306b4f263ac8b39fe480878f5378d9a

Amy, can you please validate that this is indeed intended?
My understanding is that extension icons are most often persistent so having the reader mode button appear and disappear means that all items move and also reader mode would be more easy to discover if it appears to the left rather than the middle of the icons?

Confirmed with Amy that we should not do this, running assumption at the time was that the other icons were transient.
Mark, apologies for the confusion here, do you concur that we can WON'T FIX this?

I'm fine with it in either place. Doing no work is certainly easier than moving it so WONTFIX works for me

WONTFIX works for me too.