As the wiki states, any HUD-attached object using llPlaySound() is only audible to the wearer.
However, having Restrict Spatialized Sound checked in the About Land > Media tab makes it so those sounds can't be heard.
I have a couple questions:
Why is this? Is this some kind of issue where the 'agent' (assuming the agent is the camera and the HUD) is considered to never be 'on' any particular parcel (unlike avs)?
What good does it do to have this 'silly' restriction in place? If it's truly only audible to the wearer, what's the harm in letting him decide what he's going to listen to?
Answers would be appreciated.