It seems the item is overriding the gift chest error message, when otherwise attempts to use a consumable item from within the inventory of a gift chest would warrant said message. Because inventory management is not processed from within the gift chest, the item is never officially used within the character’s inventory, and the item’s effect nor item removal are completed.
Without having access to the most recent server code, or older server code legally, my best guess is that the item is specifically missing an if statement to check if it’s a gift chest. Or some property that then is tested against that check. So the item code runs anyways, printing the line in chat, but runs into errors when applying the health modification, et cetera. Therefore my earlier theory of overriding is incorrect. I now believe the case to be, that the gift chest code is never run in the first place. And because the item can not function properly outside the player’s inventory (vault chests, bag inventories, and other in-game inventories are different from gift chests), the item effects are never realized.