8 3/4 swapped in but....thrust button?

Ok. So as previously mentioned, this axle has been narrowed.

I pulled the 'adjusting' side axle first and shined the light to look for button. No button. I checked endplay of non adjusting axle and it could move a couple of thou, maybe up to 5 thou and seemed as if I kept going it would loosen more. So I am getting my head around how this pre-load on the bearings works. I measured inside axle housing from non adjusting axle (still in place) to mounting flange on the adjusting axle side. It was about 23 1/4". I measured the, pulled out, 'adjuster' axle and it indeed measures 23 1/4" from end to mounting flange. I am assuming the button is there to have less friction between axles. Any reason this setup wont work? If I shorten axles any more I might run a little shy on spline. If I have to have a 'button' for space between axles, can I just use a hardened washer as to not shorten axle?

Thanks for the input fellas.