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TL;DR: It is not allowed, it provides an unfair advantage.It's not called a hack, but it's generally the same thing since it gives an advantage that is not in vanilla minecraft. Damage indicators aren't allowed and I suggest you report that player and not use them yourself.
QA;TL?
ya forgot to lock the thread sillehTL;DR: It is not allowed, it provides an unfair advantage.
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