Not a pro but I would rework the bath and closet entries to avoid this

While you are at it, move the entry to bedroom 2 so it doesn’t open off the entry hall.

It's doubtful that the setback restrictions would allow that addition.

A walk-in closet shouldn't be in a prime outside corner.

Shift bedroom 2 to the outside wall.

Shift the closet to the inside corner.

Shift bathroom to the prime outside corner.

Per Chispa's recommendation, I would agree that your idea of the closet in the exterior corner is not preferred. I have assumed that the 3rd bedroom you mentioned takes up the current space next to bedroom 2. Bedroom 3 now becomes bedroom 2, your master entry can have a bit of privacy and the bathroom and closet are adjacent for ease in dressing, etc. Master bedroom would now be a nice retreat in the far corner of the house.

Thank you all! I really appreciate all of the thoughts and ideas. This is what we ended up going with. Couldn't avoid the closet in the corner but ultimately very pleased. Now to figure out how to arrange the awkwardly long living room (will be making a separate post on that). Thanks again and I hope everyone has a splendid holiday.

Glad you like it, but for me, it looks like a maze and some wasted space. The guest bedroom off the entry and living room are not great. All you had to do was make some Tetris moves with the rooms and your original plan would have worked better than your last one. The original guest bathroom was much better too. I don't think the jack-&-jill bathroom that is only accessible from bedrooms is an improvement. Most don't wants an office in their bedroom either and if you like watching TV in bed, you have no wall to place one. And that guest bedroom door is ruining your living room potential.