menu nicklist { 
  $iif(%muted [ $+ [ $1 ] ],Unmute,Mute) $1: $iif(%muted [ $+ [ $1 ] ],unmute,mute) $1
  Unmute All { unset %muted* | mode # -m | say Everyone is now unmuted from # $+ . }
}
alias unmute unset %muted [ $+ [ $1 ] ] | say $1 is now unmuted from # $+ .

on *:join:#:{ 
  if (%muted [ $+ [ $nick ] ] == muted) { 
    timer 1 5 mode # -havoqe $str($nick $chr(32),6)
    msg $chan $nick $+ , You are muted from # until Further Notice.
  }
}
alias mute { 
  var %x = 1 
  while ($nick($active, %x)) { 
    mode # +vvv $nick($active, %x) | inc %x 1 
    if (%muted [ $+ [ $nick($active, %x ] ] == muted) mode # -v $nick($active, %x)
  }
  mode # +m
  mode # -havoqe $str($1- $chr(32),6)
  say $1 $+ , you are now muted from $chan until further notice.
  set %muted [ $+ [ $1 ] ] muted  
}

that should work