Health issues due to the "wifi" shirt seem very unlikely. It's just a signal strength detector and doesn't transmit at all. Whether it's a reliable indicator of whether you can get a wifi connection I can't say, but I don't see any technical reason why the shirt can't look cool.
A person with chemical sensitivities should obviously take a deeper look, but really, if you have that kind of health condition you have to get used to keeping an eye on things like coloured dyes. Such conditions are fortunately quite rare.
