I see what you mean. If I had to guess, on my Framework 13 it looks like the LED might be on the top side, but I have to look really closely to see that it is marginally brighter (and I am still not sure if it actually is, or I am just imagining this).
As for PWM, this is a bit confusing. I am pretty sure that the LED used to be PWM-controlled, e.g. based on this reply: Power button light - #2 by Kieran_Levin. Well, also, based on this old thread, it used to be RGB: Reprogramming the LEDs for the holidays!. I think they’ve switched away from RGB to white-only, but I thought it was still PWM, since you can configure the brightness level in the UEFI settings (alas, there are only three steps to choose from). I have never managed to find a way to control it fully from the EC, but, anyway, I think PWM might already be there, and that firmware changelog is purely about making use of it. But if there is a way to make the new LED be NOT SO BRIGHT, then it is absolutely worthy an upgrade!