This is because this feature reused the infrastructure built for T132975: Allow unwatching a Flow topic/board from a notification about that topic/board. That was a one-way toggle (allow unwatching, but not rewatching), so it made sense to have the toggle disappear after use. For mute/unmute, we offer the toggle in both directions, so it doesn't make sense. We've currently hard-coded the assumption that all dynamic actions should disappear after the action taken, so we'll have to make that behavior configurable and turn it off for mute/unmute.

In T254276#6187462, @Catrope wrote:

This is because this feature reused the infrastructure built for T132975: Allow unwatching a Flow topic/board from a notification about that topic/board. That was a one-way toggle (allow unwatching, but not rewatching), so it made sense to have the toggle disappear after use. For mute/unmute, we offer the toggle in both directions, so it doesn't make sense. We've currently hard-coded the assumption that all dynamic actions should disappear after the action taken, so we'll have to make that behavior configurable and turn it off for mute/unmute.

Ah I see. Reading the comment history on that task I understand the reason for not including an option to rewatch. However, we may wish to revisit this decision if and when the muting/unmuting behavior for all notifications on T115264 is done, since it can be a little confusing for users that one type of "monitoring" notification action has an undo but the other does not.

Commenting here to note that the Editing Team would also value being able to offer people the ability to subscribe/unsubscribe to specific conversations from within the notifications panel and Special:Notifications page.

More context in T274279#7160273.