I enjoy how dismissive most replies are here, over something that isn't mature. I don't mean speculation about rumors, but the assumption that such a button couldn't be mapped to anything else, and is strictly for mute. As a user who always has my iPhone in mute, I would welcome an 'action button' instead of a mute switch, similar to my AW Ultra. iPads of old with the ringer switch could be mapped to rotation lock.
On the subject of knowing the status of mute in your pocket... your hand's already in your pocket, you can't pull the phone out? Does it really add a level of complexity to warrant a scoff? Do you find yourself devoting hours to toggling your mute? The switch already has haptic feedback when mute is active, which could be implemented to a button press just as easily (and obviously will be present if it is solid-state as rumored). Press the button in your pocket until you feel 'on' haptics. Mute is on. Just as easy to determine in your pocket.