So, given that my answer to "which drill is best?" is always "whichever one feels best in your hands" I feel silly defending this stupid button but I did come to two conclusions about it last night. One I know to be right and the other someone with a Festool C1# can chime in on if they want.
The first is that not being able to feel whether or not the drill is in forward or reverse the moment you pick up the drill is weird. When you pick up a drill with the standard slide toggle it's trivial to just feel for where that switch is and know if it's in forward or reverse. Maybe Milwaukee could've made the light light up when the drill feels itself being moved (like lots of TV remotes do) but I'm not one to generally ask for more stuff that can break to be added to a tool.
The second is that I feel like the position of this switch might actually be the "right" place for the switch if you hold a C style drill with your middle finger on the trigger as Festool always tells us is proper (at least their ad photos show this). When I bought my c12 and c18 and gave them the good ole college try I had already committed to holding a drill with that hand style. When I returned them I even felt it was more natural to hold my T style m12 tools in this manner. Now that I'm on this C style m12 drill it's the natural way to hold it and my thumb just naturally gets to the top to push the direction button. That said, when I use the middle finger trigger grip it's kind of awkward to slide the standard toggle switch because my index finger is resting above the switch on one side and my thumb is above it on the other. I imagine with a middle finger trigger grip the c12's and c18's toggle switches are much less convenient than if you were holding them with that standard, American, index finger on the trigger grip. I admit that if you use the index finger on the trigger grip then the slide toggle is the obvious solution. Anyway, YMMV, I just don't see it as a stretch for someone to find that location to be a better location for that style of drill.