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Instead of using an item to determine who is a spectator, which can result in accidental spectating if you happen to have a spectator pass on you, I think it would be simpler to add it into the party window. The party leader will be able to select a party member's name from the list and "make spectator."
Before entering a mission or dungeon, the party leader will get a reminder message
You have (2) spectators in your party:
Name1
Name2
Spectators will not be able to interact with the rest of the party, receive rewards, count toward dungeon party limits, or (blah blah rest of explanation). Are you sure you want to enter with spectators?
[YES] [CANCEL]