Hi PeterBphoto,
I can confirm this!
Safari 14.1.2 - macOS 11.6 - MBA M1 here.
I think it’s a bug - if I remember correctly the problem exists at least since macOS 11.3 here.
Also happens during/after Safe Mode & with Guest Account.
Also happens with a default Bookmarks.plist.
Resetting Safari or clearing the Favicon Cache doesn’t solve the problem.
Only happens when in „Edit Bookmarks“ mode.
Navigating bookmarks through the Bookmarks Sidebar shows the right icons.
Also navigating the bookmarks through the Favorites Bar does show the right icons.
Interesting side effect: open Activity Monitor and select its CPU view -> Safari CPU goes to 120% when in „Edit Bookmarks“ mode - compared to about around 7% with only Safari Support Community page & this thread open.
Also navigating bookmarks through the „Bookmarks“ menu item gives me the spinning beach ball of death (with a Bookmarks.plist of about 2 MB).
Safari Technology Preview (at least 125-132) doesn’t show the „Edit Bookmarks“ mode wrong icons problem.
Can anyone else confirm this?