You need to right-click a folder or individual bookmarked item, not on empty space. This applies regardless of whether you are accessing it within the Library or in main Firefox UI. If the desired folder is empty, you'd need to open that folder's context menu. There is no way for the extension to change this behavior.

Also, due the the way the Firefox extension API is implemented, if in a top-level folder (such as 'Bookmarks Menu' or 'Bookmarks Toolbar') you need to right-click an existing item inside that folder rather than right-clicking the top-level folder itself. (Meaning if the top-level folder is empty, you need to add a bookmark via some other method first.)