My little fix on this is when using the login widget I use custom text for when user is logged in and just create a link that allows user to logout. Something like this:
You are currently logged in.<br/>
<a href="https://mydomain.com/wp-login.php?action=logout">Logout</a>
Not perfect but it works for what I need. But the user also has the admin toolbar at the top to logout from as well.
