@lauren @mmasnick The phone company did this too. First you had to rent phones from them, then pay for each device connected. One of the ways they found "illegal" phones was the voltage drop from the number of phones that rang for an incoming call. So phone makers added a switch to turn off the ringer.
First phone mute button was for pirate phones.
@lauren @kevin @mmasnick
Exactly, only one extension could be used at a time.
Admittedly, I was 10 when I first encountered this and it was in locations controlled by the US Military (offices and off-base housing) in West Berlin, so I don't know if this was a standard thing or if I misunderstood its purpose, etc. I never saw it anywhere else after that or during the 12 years I spent in Southern Germany in the 1980s-90s.
These phones looked like the standard gray German phones of the day except for the mechanical indicator. Now that I'm wracking my brain over something I haven't thought of in close to 50 years, I think some of our German friends had phones like these, too.
It may have been a Cold War/Berlin thing.