Mods button should not show the diamond on the button if the updatable mod is deliberately hidden (but may not be deliberately excluded from updates) or is a library and libraries are hidden.
Case in point: mods button showed a diamond for Fabric API, which is a library and I have libraries hidden on list.
Tested on 5.1.0-beta.4 for 1.19.3.
Mods button should not show the diamond on the button if the updatable mod is deliberately hidden (but may not be deliberately excluded from updates) or is a library and libraries are hidden.
Case in point: mods button showed a diamond for Fabric API, which is a library and I have libraries hidden on list. Tested on 5.1.0-beta.4 for 1.19.3.