The way it works: Icon passing is ON before the game. Enter the gamestate: icon passing is disabled. Either pause/wait until the period ends -> check A/V settings, Icon passing/pregame lighshow are both disabled ->enable them. If all players have it enabled OR disabled, then there will be no FPS stutters/jank. Icons usually show up, but sometimes they do not (passing will still work, but you need to know the buttons from memory). Game ends. Next game starts, Icon passing is disabled and you need to go through the pause menu and enable it again.
Basically, it defaults to OFF in the gamestate even if it is ON when in the menus.