I think
Party has hit the nail on the head. If you play the correct strategy, you are going to be the most profitable. Depending on how the table plays, depends on the strategy you use.
Also Remember, that the person who has 10x more of a stack than you will be very easily tempted to (and have the right amount of chips for Dan Harringtons 10% rule in tourney play) call with anything to try to elimate you. So thank your lucky
stars that the chip leader at your table is not playing, as he would be the one who is most likely going to knock you out.
On top of that, it makes his cards very easy to read. He sits out for two circuits, then suddenly decides to play a hand... hmmm, what cards do you think he has? Most probably AA,KK,AK maybe QQ. So it is easy to drop you AT suited, becuase you know that you are most likely dominated.
Just becasue he is sitting out, does not mean that he is not part of the game, and yes you can sit out in live tourney play. Your cards are mucked if you are not at the table, so it does and can happen at live tables. If you pay your money, you are not doing anything wrong by sitting out and not playing hands.
Add to this that if you have position over the sitter out, you can steal his blinds every time, and if the levels are at a respectable amount (even 100/200) it can really help your stack. Embrace this player, becuase as long as they are sitting out, they are not knocking you out!!