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Waterfox × TreeStyleTab: A Collaboration for the Waterfox Sidebar
(www.waterfox.net)
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It would minimise until I move the curser to the left, which then it would pop out. If the curser leaves the tab area it would minimise itself. It used to be a function once upon a time before Firefox changed how extensions work.
I couldn't get used to pressing a hotkey/button to hide/unhide it when the current version came out. I did find some custom scripts that might work from some casual searching though.
The Waterfox blog post doesn't mention it, and you'd need to change userChrome.css to do that atm. Personally I use TreeStyleTab as my primary tab view.