DC: Instead of having it shift locations, have it change the Margin setting. The vertical margins don't work, but the horizontal ones do.
Size: full regardless of hover setting.
Location: 1,1 (or 1,-14 or whatever it is when titlebar visible). No change with hover.
OnHoverIn: ChatDisplay.Margin='18,0,0,0'
OnHoverOut: ChatDisplay.Margin='0,0,0,0'
It will cause the text to re-wrap, but there won't be any wasted space.
MirageKnight: Most people play with that setting OFF.
/chat_clickthrough false