In bug 1533150, the ability to toggle Private browsing access was disabled for privileged add-ons, because it wasn't meaningful for the specific example from that bug.
There is a way for extensions to opt out of any private browsing access by setting "incognito": "not_allowed" in manifest.json (bug 1536459), but there is no way for extensions to offering a choice to users: by default incognito is allowed without a way to disable it.

For extensions that make extensive use of content scripts, and only need the privileged signature to integrate in the browser interface, this limitation is too inflexible, as it prevents users from disabling an extension in private browsing mode. An example of that is the Firefox Translations extension (Bergamot): https://github.com/mozilla/firefox-translations/issues/318

I suggest that we allow the user to customize IF manifest.json contains any value for the incognito flag (the Bergamot example uses "incognito": "spanning", but "incognito": "split" should also trigger the customizability mode). Alternatively, we could introduce a new flag to allow privileged extensions to opt in or opt out from required private browsing access.

Set release status flags based on info from the regressing bug 1533150

:rpl, since you are the author of the regressor, bug 1533150, could you take a look?
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Clearing the needinfo assigned to me: Rob already took a look as part of filing this issue and he has described the interaction between the choice and change introduced in Bug 1533150 and this issue in comment 0.

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

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If extension is visible to users (ie installed in user profile), we can allow changing this.