Okay so, after a good while of tweaking optifine settings, crashes and whatnot I discovered that turning Fast Render on seemingly fixes the issue, it just makes the person an obnoxious shadeless block of whatever color their nametag is. I'd like to emphasize that this took me a while to find, and there are even reports of people without optifine having the same issue, they're pretty much doomed.
The screenshot I posted was an ET, doing an event. For some illogical reason they had the glow effect on, which blinded just above half the people in the event. Even with no blindness, the ET was still a hideous single color sillouette. Seriously guys, we can't even see their skin, that's pretty damn shitty for roleplay, kills whatever scraps of immersion there may have been and seeing that thing for a long time can even be headache inducing, it's a really bright, obnoxious effect.
I see no reason to keep this as a feature whatsoever. If you guys can't keep tabs on who you gave one of the most abusable tools in existence, by like simply writing their names down or something, then honestly you're garbage and shoul be ashamed of yourself.
That's all I have to say.