I know that at PokerStars it is specifically allowed.
It's actually a good strategy if the blinds are low, because other players are forced to play against each other without trying to go at the big fish, while the player sitting out risk nothing but lose a little of his chip lead, blind per blind.
Things get worse however as the blinds and antes increase, as also the number of players dwindle. They can then check their way to steal the blinds from the player sitting out.
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