I was thinking about having a hidden auxiliary set of Favorites icons on the right side that only become visible in a right hand mode of the “Hide names of favorites” feature.
This allows you to keep the current format while adding an extra set of visuals that would (in my opinion) make the feature way more interesting. In my opinion, this would slot into your already beautiful workflow with the app list, which is the reason I have been using this launcher for so long. And all through a change that hopefully won't create more work for you in the long run. Hopefully… Haha
It also wouldn't matter if the right hand icons overlap with the Favorite names in regular mode, because it will only ever show when you hide the two other Elements.
Here is my vision:

Before:

With love from Sweden,
Johannes
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In Review
Feature Request
About 3 hours ago

Johannes Haddad
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In Review
Feature Request
About 3 hours ago

Johannes Haddad
Get notified by email when there are changes.