Whilst i see the reasoning behind having no proximity chat, i feel there is a simple quick solution.... well, techicaly two solutions
If the game had proximity chat and you get within range of an irritating 12year old, or you are playing with your kids (as i do) and you come in to range of Captain Swears-a-lot. It can get tedious, I dont need to know they have done my mom, I already know everybody has.
We have R3 inspect player, why not simply add a chat enable/disable toggle option in the R3 screen, If we choose disable, that player is muted until we uncheck the box (please no auto reset mute... I'm looking at you Killzone Shadowfall)
A similar approach can be used in multi player, upon entering PVP after match making, team chat is enabled automatically (still respecting muted players and keeping them silent) with a fast mute available from tapping touch pad twice to open the player list so you can mute somebody you want, or a triple tap or hold touchpad for 2 second to mute all
Thoughts guys and girls? and sorry to Xbox users, i have no idea what your touch and R3 equivalent button is
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bumpety bump