TLDR: This addon genuinly tries to do what it promises but Firefox defaults + servers = useless addon.
The addon does something, but it's not resulting in refusal of webp images.

By clicking the "W" button on the toolbar, the sent "Accept" headers either include or don't include "image/webp", but it's of no use at all if the default following is "*/*".

It's possible to change the value of the "image.http.accept" key in "about:config" to (for example)
image/png,image/jpeg;q=1
but this addon will then not be able to change this value anymore.

Furthermore, websites such as Youtube (Google in general) just plain refuse to offer anything but webp, even if Firefox does not indicate support for it in the "Accept" header. You may need to fool these websites in assuming you're using an old browser by changing or emptying the "general.useragent.override" key.

Worked for about 5 minutes and then failed, allowing webp files through. I thought it was great while it lasted. It might be that the web site anticipated the add-in and bypassed it's functionality of not recommending webp images.