I use a chat service that has this feature on by default (for real-time chat customer support, not for general messaging), and never in the history of its usage has a person complained about it. For every 10,000 people that may not have an issue with it, 1 may have an issue about it, and with these numbers it's really up to that 1 person to guard their privacy better (disable JS, never step outside their house, etc) than to inconvenience 9,999 other people from the benefits.
The experience is all in the context, and since this is only general behavior for customer service chats (where you're expected to send everything you type and the other end is simply trying to help resolve an issue), it's not really a realistic issue in terms of privacy. I agree that if facebook messenger started doing this and showed the other person what you are typing, this would be unexpected and potentially unwanted behavior, but the likelihood of unwanted behavior in a customer support context is extremely rare.