We’re currently working on defining a compact mode experience. I will post more details when we have more to share.
We are getting closer… the team is almost ready to rollout MacOS notification support internally for testing – we hope to have it to the public by the end of this quarter.
This issue is also affecting our Mac users. For a comparison, Outlook 2016, although not integrated with Apple notifications, doesn't display new messages received when the Mac is in do not disturb mode.
Hate to be the bearer of bad news. This item has been declined. There will be no work to hide or remove the reply button.
As many people have commented, a big ask is to help improve how people distinguish between giving a reply and starting a new message.
For that the focus will be on this item. “Better visual delineation between `Reply` and `Start a new conversation`”
This feature item is still in the works. We will keep you posted as we have new info from the feature team.