Yeah, undernet has it. I ran into that problem once when it got set accidentally. And even if you unset it, anyone in the channel who is "hidden" remains hidden until they either rejoin or type something. I think there's a way to force them to appear, but I forget what it is. Just removing the mode doesn't, though.
I guess that in some channels, it's nicer to not see everyone who's just idling. For example, an XDCC channel with thousands idling would probably be easier to work with if you didn't see those thousand names in the nicklist. I don't think it's much use in most channels, though.
