Minecraft 1.20.1
Forge Installed With Optifine & just the voice chat mod nothing else on my server or client.

I installed Cloth and tried changing the config value from true/false, but nothing seems to work.

Optifine is not supported as it's closed source, use Sodium and co instead. Here's a good list of alternatives.
Also just in case: Make sure you're using the right Chat Heads version, Forge and Fabric are separate.