Replace text names in the presence indicator with circular avatar images or auto-generated letter avatars (initials with a color). The presence bar becomes a compact row of avatar circles instead of a list of names.
Avatars are more compact and faster to scan than names, especially when multiple users are online at once. They also give the workspace a more polished, collaborative feel — closer to how tools like Figma or Notion display live collaborators.
Each user can upload a profile photo, which appears as their avatar in the presence bar and any tooltips. If no photo is uploaded, a circle with the user's initials is shown, colored consistently based on their name (so the color is always the same for the same person). The existing name-based tooltip remains visible on hover for accessibility.