Ashik,
Yes! You are correct! Once I activated the CRM_IC_CEBP business function, I was able to add the "New Session" button to my custom toolbar and now it appears in the WebUI and the functionality works as designed: once the "New Session" button is pressed, a new session is opened in the same browser.
Thanks for your help Ashik- I owe you one.
For everyone else: to activate the CRM_IC_CEBP business function, you have to go to transaction SFW5, and to click on the check mark for "planned status" and then click on "Activate" at the tool bar under System Settings.