Glad you like the addon :)
How are you opening tabs from the the bookmark bar? If I right click on a link on it (or in a folder on it) and then select "Open in a New Tab", it correctly opens a new tab with the proper back button functionality. Are you doing something different? If so I'd love to hear so I can make it work with that too (contact info in addon description).

Unfortunately it's not possible for a web extension to replace the icon of the back button. The only alternative would be to provide a button with the desired functionality. I would be happy to implement this if you'd like - however it has 2 pretty major downsides:
1) Would only work with the compact layout as web extensions can't make big fancy buttons like the native back button
2) It seems to be impossible to remove the browsers default back button without using advanced (and requiring manual work by the user) to remove the browsers native back button - so you'd end up having multiple back buttons :/