@Lastique does it still appear if you use the UI's "X" to close the friends panel? In my testing (and before this udpate) it would come back if closed via i3wm's mod+shift+q (kill window) command but stay closed if I used the UI.
The full client itself now seems to be following suit with this despite me disabling the "Close to Tray" behavior in the past, requiring me to close the client from the tray icon instead or via the dropdown menu in the client.

I am also having this issue. Chat pops open when I sign in and shows that I am signed out yet tells me I was last online [amount of time since I last opened Steam] ago. This would lead me to believe I am being signed into chat and then signed out on start. When "Sign in to friends when Steam Client starts" option is disabled, I shouldn't be getting signed in to chat at all on start.

@Lastique does it still appear if you use the UI's "X" to close the friends panel?

Yes. I close the window by pressing X, but every time I start Steam client the window appears again.

Replying to https://github.com/ValveSoftware/steam-for-linux/issues/9599#issuecomment-1593262606

Had same issue after last steam update (I'm using Xubuntu 22.04.2). I did this and it solved the issue:

sudo apt update
sudo apt upgrade
sudo apt autoremove

steam-settings-Friends and chat-Log in friends when launching the steam client -=-enable!!!
reboot steam
steam-settings-Friends and chat-Log in friends when launching the steam client -=-disable
reboot steam
it's all ! the window no longer pops up when starting steam !

@huliqan Thanks, that helped in my case.

I know this issue is listed under the steam client for Linux, however I would like to mention that I have the same issue with the Windows client as well.

Doesn't work for me on Manjaro. Enabling the setting opens the window and signs me in, disabling the setting opens the window again without signing me in.

steam-settings-Friends and chat-Log in friends when launching the steam client -=-enable!!! reboot steam steam-settings-Friends and chat-Log in friends when launching the steam client -=-disable reboot steam it's all ! the window no longer pops up when starting steam !

steam-settings-Friends and chat-Log in friends when launching the steam client -=-enable!!! reboot steam steam-settings-Friends and chat-Log in friends when launching the steam client -=-disable reboot steam it's all ! the window no longer pops up when starting steam !

It does not work on Ubuntu 22.04.2. The behavior is same as described by echotic

Seems to have been fixed with

Steam Version: 1687386907
Steam Client Build Date:  Wed, Jun 21 23:18 UTC -08:00

I no longer have the Friends & Chat window showing.

Same here. It seems now Friends & Chat window respects relevant assigned settings.