I've just tested it, the feature does also hide NPC chat aswell as players, and by the looks of the script is being used regardless of whether the player is sparring or not.
If your intention was for chat to only be disabled while you are sparring you should only be including the - 0x80 part here -
PHP Code:
if (player.x+1.5 in |17, 47| && player.y+2 in |15, 37|)
{
if (this.attr[10] == true)
{
enablefeatures(allfeatures-1-2-4-0x10-0x20-0x80);
}
Though I personally don't think default chat is a decent method of displaying a queue line, could probably get messy if it became big, with Classics arena system I have the queue stored as an Attr value (tokenized and processed whenever it changes), front 2 sparrers with their heads + names displayed as a showimg on screen, and your position within the queue displayed by showtext if behind the front 2.