This was never in the base game of 2.0, or in any of the betas I participated in, so RMT was not the reason for the lack of this feature.
I don't think it even has to be this complex, though I would prefer if the "friends and fc only" were an option rather than a standard. No other mmos have such rigid constraints, even ones with severe rmt problems.
Honestly I think a block would solve that specific fear though. I mean we wouldn't delete /say and /shout just because rmt makes walls out of text for those. Hell, the speech bubbles would be a lot less visually oppressive than the chat box since culling and draw distance are a thing.
This seems kind of like a complex system for complexity's sake. But it is a novel idea to have some kind of distance fall off for relevant chat. Though it is quite unstandard for mmos.
Though I wonder, where would you enter text if you closed your chat box? (also you can close your chat box??!)
Could be a decent toggle button
Interesting anti rmt solution, though needlessly punishing new players by not allowing access to a basic mmo ui element and communication tool since rmt advertisements are likely to be quickly blocked by the populace and localized in very specific hotspots. I'd prefer to see a spam throttle where if you send x messages in y seconds your bubbles will stop displaying for z seconds or you will be unable to chat at all for z seconds. It's a pretty standard practice.
I don't think emotes should interact with the bubbles at all. The whole point is to be able to read what people are saying and seeing their animations at the same time. Also I think 5 yalms would be far too short (for me at least) at least for /say and like chats (/whisper maybe). It would be nice to have a radius slider option for that. (I feel like I'm gonna have to mock up this UI at some point :T)
There could also be some kind of system where the higher the chat traffic is, the shorter the draw radius is for highly used channels, like how the game culls players based on how densely populated a space is. Though that kind of process might be a tad resource intensive.
This I like, especially for things like linkshell and yell bubbles since we already have cutscene boxes for those to go off of for design
While I think the 500 characters might be a tad much, 140 might also be a bit small, especially since you wouldn't get a warning when you're nearing the cutting point. Most games cut off the speech bubbles at the point in which the chat box will accept no more characters, and I think that SE should follow the same trend, if not this could always be another slider option.
Side note: I'm probably gonna add examples from other mmos to the OP