- People think that messages they haven't read will be below ones they have.

which is in direct conflict with your first point. Which of the two is stronger probably depends on the person.

And indeed it's a tradeoff between confusion about chronologicality vs confusion about what's been read, and which is more important will again depend on the person, and the specific discussion. If not reading timestamps is a large concern, there could always be some explicit separator in the log (e.g. a line of "In the past at 2024-12-05 12:34:56"; in my client I have a funny "X (hours|days) earlier..?" when there's a negative time delta between messages, as opposed to a "X (hours|days) later..." on a large positive time delta, though a date would probably be more sensible; and for what it's worth I also have a `/sort` command to reorder the visible log chronologically).