Is this a thrust button and can it be removed?

Just slide the axles into the empty banjo, and snug them down with a couple of bolts. Then, measure the distance between the axles on the splined ends. If it is less than the dimension of the spacer, then you have three options.
Eliminate the spacer, or
Shorten the axles, or
Do what I did; fabricate a spacer or two, to install between the backing plates and the flanges. Now you can use the adjuster again.