The organization plans to remove the Compact option from the customize menu and migrate users who use Compact to the Normal mode once the change happens. The preference browser.uidensity will remain for the time being, but it is possible that it will get removed at one point in time as well or that the compact mode value won’t change it anymore at the very least.
This is a terrible decision. I obviously use the compact layout everywhere, because not only does it look better and use less space, it also doesn’t have that insanely oversized back button. This change makes absolutely no sense to me, and I can’t wait until we get a hack to bring it back.