I think you guys need to make this chatbox an actual chatbox. Make it a wiget you can spawn that is movable with a local chat history or better yet, make it a movable UI element that is on by default that is in a minimized state. It can be somewhere off to the side and it moves with you like a camera element. Have a keyboard button and speech to text button that allows you to say or type what you want in a field before you send it. Make this menu even have a toggable bind for people to get quick access.

The menu itself should have a few states for customizability. Minimized, half minimized, buttons only, you get the idea.

Other then that I think the text that other people see should be a speech bubble next to the avatars head that looks like the VRChat logo instead of the one directly above head. Could even make the bubble moveable and the little arrow will always point the the players mouth no matter the position.

edit: I also want to add it would be cool if the chatbox itself had a listener mode where if were communicating with somebody using your voice it would also translate what your saying to text in realtime. which could allow you to simultaniously communicate with deaf people.