I've been hit with this bug and know someone else who has. What's strange is this appears to affect players based on Microsoft account rather than by platform. I play on both Nintendo Switch and Windows 10 as well as on multiple realms, both where I'm a member as well as one where I'm the owner, and no matter which platform or realm I used, signs would go blank, anvils would rename everything to ########### even if I didn't try to rename (also charging me the rename cost which was wasting levels), and chat would not show up for other players (I normally call up the few people I play with, so they verified over the phone they could not see my messages).
One person I know who isn't affected also plays on Nintendo Switch while one that is plays from XBox and has access to a Nintendo Switch where she also experiences the same, while her daughter who plays on that same Nintendo Switch does not have the bug.
Thankfully, I've found something that actually seems to fix this (short term?): [How to fix your shadow mute (with proof) | Minecraft Bedrock Tutorial - YouTube|https://www.youtube.com/watch?v=dqLHpBLu5oE]
The steps in the video are weird and seemingly completely unrelated, but I took a shot and did this on my own realm while I had loaded up a test map. Sometime after chatting the / and getting back "Cheats are not enabled on this world", I placed a sign and was able to keep the message on it. I hopped over to my friend's realm and signs and chat now suddenly worked there, too, without repeating the steps.
Now, if we don't go down the conspiracy route of "we've been shadowbanned", my guess is that something somewhere that handles player-entered text gets into a state, similar to like in a command line application where you forget to terminate a string literal and it just doesn't process any commands until you terminate said string literal. I'd further hazard a guess that something about one of the symbols entered from the video (or perhaps some sequence of them) somehow fixes that state so that future messages are processed normally.
I thought I'd try this myself with 1.20.50 now released and it's still there. I'm pretty sure this issue and MCPE-120618 Custom items are rendered too large in third person view - Jira (mojang.com) are the same bug as the issue seems to only apply to items with a format version of about 1.16.100 or higher. Thing is, none of the affected items listed in the description have publicly available json configuration from what I can see.
That is until now. As of 1.20.50 the Apple item was updated to format 1.20.50 (see bedrock-samples/behavior_pack/items/apple.json at main · Mojang/bedrock-samples · GitHub), and as of this update at least (I haven't checked older), it is also affected by this bug:
[media]I had hoped that if there was at least one official item with a more recent format version that I could see how to fix custom items that use features that have more recently been available in newer versions without forcing me to also use 16x16 resolution textures. Sadly, the update to the apple has confirmed that apparently not even vanilla items can be correctly configured to work with both a recent item format version and any texter pack with a higher resolution than 16x16.