Verified that the lack of a show/hide wikidata link in recent changes is indeed a bug, and it only happens if enhanced recent changes is enabled. In that case, even adding the URL parameter by hand does not have any effect.

(In reply to comment #0)

On the top of the watchlist there is a "show wikidata"/"hide wikidata" link
(though on recent changes there is not - not sure if that is another bug or
an
intentional omission, personally i feel it would be more useful there).

I think that's a known todo.

Clicking this link has no effect whatsoever if the "Group changes by page in
recent changes and watchlist" preference is enabled.

Confirmed. We have several reports of this being broken on it.wiki, probably due to this bug.

(In reply to comment #2)

(though on recent changes there is not - not sure if that is another bug or
an intentional omission, personally i feel it would be more useful there).

I think that's a known todo.

See comment 1 :)

https://gerrit.wikimedia.org/r/#/c/48438/ - this patch simply omits the wikidata edits if enhanced changes format is used.

We are working on a more complete solution that will support the enhanced changes format. This involves a bit of refactoring of code in core and Wikibase, so it will take a bit more time to get it done, reviewed and deployed.

Verified in Wikidata demo sprint 32

(In reply to comment #4)

We are working on a more complete solution that will support the enhanced
changes format. This involves a bit of refactoring of code in core and
Wikibase, so it will take a bit more time to get it done, reviewed and
deployed.

Is there a bug for it?
https://www.wikidata.org/w/index.php?title=Wikidata:Contact_the_development_team&diff=9849883&oldid=9847996