i think you can still move the icon into the bookmarks toolbar - Customize Firefox controls, buttons and toolbars

The "actions" based upon the location of that Bookmarks toolbar button was changed for Firefox 23.0. The new default location appears to be on the Navigation toolbar; for me with a new Profile it was to the right of the Search bar and the left of the Download "arrow" / downloads progress display button. When it is on the Navigation toolbar the "Bookmarks" label isn't shown, but a "drop-mark" arrow is there. Plus that Bookmarks button doesn't automatically move itself when the Bookmarks Toolbar isn't showing as with previous versions since Firefox 4.0.

You can move that button anywhere you want it via the Customize feature for the toolbars.
https://support.mozilla.org/en-US/kb/customize-firefox-controls-buttons-and-toolbars

I can move it to the Bookmarks Toolbar with the customize feature, but the label "Bookmarks" does not reappear, although all the other icons on the Bookmarks Toolbar do have labels. Annoyingly different.

Further to the last post, once moved to the Bookmarks Toolbar it opens the bookmarks window on the left of the main window instead of the right. Moving it back next to the home page icon on the Navigation toolbar doesn't revert to the bookmarks window opening on the right. I realize it's only a case of what you are used to, but I would expect the window to open under the icon on the right.

I saw the same effect as mentioned by Redk. I noticed that the down arrow which was part of the bookmarks icon in the customize menu also disappeared. I uninstalled the bookmarks selection from the toolbars (both bookmarks and nav). I quit and restarted Firefox. Lo and behold, the down arrow had returned to the icons in the customize menu and I was able to place it in either the nav or bookmarks toolbar. It behaved as a pulldown, which is what I wanted. Conclusion: I think Firefox may have roaches breeding in the walls.

There are two different "Bookmarks" buttons. You both moved the wrong one to that toolbar, "grab" the other one.

One button opens the Bookmarks Sidebar, while the other opens the Bookmarks "menu" - relative to where that button is placed.

Nope, what you say may be supposed to be the case. I did indeed have two bookmarks buttons. Neither of them had the down arrow and neither of them produced a pulldown -- I tried both. (I was not aware there were supposed to be two.) After restart, there was a button with an arrow and I used it. I did not, at the time, look for the other. If it was present, I don't believe it was adjacent. I did look just now, and the non-arrow one is there. I still claim my conclusion of the presence of roaches is correct.

Only one in my 'Toolbar Layout' but I've got the label back by changing the 'show' option to 'icons and text', albeit the label is now below the icon. Still opens the bookmarks pane on the left if in the bookmarks toolbar and only back on the right if I use Troubleshooting - Reset Firefox.

The second Bookmarks Menu button may be located on one of the toolbars (Navigation Toolbar or Bookmarks Toolbar)

If the Menu bar is visible then Firefox will hide the Bookmarks Menu button once you close the Customization window.

Use Toolbar Layout (Customize) to open the Customize window and set which toolbar items to display.

• if missing items are in the toolbar palette then drag them back from the Customize window on the toolbar
• if you do not see an item on a toolbar and in the toolbar palette then click the "Restore Default Set" button to restore the default toolbar setup

• Firefox menu button > Options > Toolbar Layout
• View > Toolbars > Customize

See also:

• https://support.mozilla.org/kb/How+to+customize+the+toolbar
• https://support.mozilla.org/kb/Back+and+forward+or+other+toolbar+items+are+missing

Found the second, but as I said it opens the bookmarks pane on the left, not on the right under the button, when it's placed on the bookmarks toolbar. The only way to get the pane back on the right hand side is reset firefox!

Firefox has two bookmark buttons with a star in the Customize window.

One star button has a drop-marker that open the Bookmark menu and may appear on the Navigation Toolbar or on the Bookmarks Toolbar if the menu bar is hidden.

The other star button without the drop-marker opens the bookmarks in the sidebar (View > Sidebar > Bookmarks).

Interestingly a number of changes have occurred overnight and this now works.