In about:config, you can set the flag browser.compactmode.show to true.

Then if you right-click on the toolbar and select "Customize Toolbar...", there's a dropdown "Density", which now contains an entry "Compact (not supported)".

This compact mode was part of the previous Firefox design (Photon) and was declared unsupported with the latest redesign (Acorn), presumably because one central design element of Acorn is the tall tabs, which can show text hints under the tab title, like "PLAYING" to indicate that this tab is playing audio, or "MUTE TAB" if you then hover over the favicon/speaker icon.