It has been about a month since the Chase the Skies drop was released. Having given it a chance, I can confidently say that the Locator Bar has been detrimental to the multiplayer experience.
The Locator Bar removes an entire aspect of the game. It is no longer possible to have privacy anywhere in the Minecraft world. This means no more secret bases, no more hidden chests, and no way to maintain the integrity of your location.
The Locator bar is useful to many people. It reduces reliance on co-ordinates, so I don't suggest its removal. However, it enforces this strict publicity on every player, without recourse. This doesn't allow players to find eachother - it forces them to.
Sneaking is not a solution to this. No player can sneak forever. Invisibility potions and pumpkin heads are are also only temporary measures that actively detriment gameplay; There is no permanent way to Opt Out of the system.
While commands can modify this range, the average player does not understand game rules or NBT data - Privacy should not be restricted only to those with the know-how to enable it.
I suggest the default limit be restricted to ~300 blocks. This is much further than any player is likely to see, much further than nametags, but not far enough to cause any impact to these aspects of the game. But any distance would be reasonable - anything besides a limitless range.
Entire Communities had formed around parts of the game surrounding secret bases. It would be unjust to let that die out here.
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