The edit and block reference icons (the pencil and the numbered square) are displayed for the blocks inside “Block reference”, including the ones under “Linked Reference”. Clicking on the edit icon activates the editor for the corresponding block in the #main-content instead of the one in the #right-sidebar that it’s attached to (thus instead of the expected target of the clicking), and clicking on the block reference icon doesn’t do anything (since its target is already opened in the #right-sidebar where the clicking occurs). So, these icons don’t represent an actual option for the block, they should be hidden.