1) as a server platform, we're generally not picking a side and just opting to remain in the center, ofc, while some individuals around the team are for this system, some are also not as favourable of it, but, this isn't the first time we've decided not to add such types of botchery to the server which can easily be handled by plugins (which already exist), and will deal with the burden of ensuring that such a thing will work as expected, especially with vanillas own built in formatting stuff and all that crud. We'd rather just ensure that support exists for servers which want to use it, and let individuals disable it using plugins or whatever, we wanna focus on API and fixing things.
2) The GDPR argument is a weird one, nobody here is a lawyer so literally everything here is purely pissing in the wind to try to find an argument. I'm far from a GDPR pro, but, to my understanding
a) The server is purely a processor of data here, it's only routing and formatting messages, it's not producing them, so it's likely 100% irrelevant here that a server which is not directly in the hands of mojang exists within the routing of messages here, given that you are using mojangs platform and under their legal agreements, etc; It's not clear where much of this is going down the line, many entities are requiring that platforms step up on moderation
b) Messages you as a user send over the network on these platforms, to my understanding, is not considered personal information, and as such is generally not privy to the GDPR and it's restrictions, this is why many sites will just anonomise information like usernames, while still keeping the users actual content online
c) even if B wasn't true, it's likely that this would be covered under the exemptions to consent, i.e. the legal obligation towards platforms to report certain activities
ofc, all of this would need to go through several dozen lawyers, of which I'm not interested in paying for a consultation for over a block game, (if people think that there is an actual GDPR argument against this here, feel free to create a pot somewhere and hire a lawyer), but, things like the EUs digital services act creates a lot of headaches here as to determine how much of it applies to Mojang and in particular 3rd party services, many governments have been stepping up, or at least talking about, the requirements for platforms to implement moderation tools and all that jazz, intentionally disabling this thing could actually have legal implications down the line, but, that's purely speculation on my current understanding of what's going on here; ofc, only time (or a bunch of money being thrown to a lawyer) will tell