Other players lanterns are not emitting light in multiplayer with shaders (Bliss) enabled, i've not checked without shaders yet though

I'm not sure if this is possible because it's up to the shaders to determine if an entity should light up, and I can only realistically patch what Iris gives to the shaders. All this mod is doing to get handheld shader lighting working is tricking it into thinking the player is holding a lantern.

You can use Sodium Dynamic Lights and disable personal lighting, that way only other players would show up. that should work