Mentioning a user ( @username ) adds them to the watchlist, Can also remove from watch list using -@username
Still limitation that mention has to be beginning/end of comment or surrounded by whitespace.
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twitter @ style mentions for Jira 4 and add/remove watcher functionality for Jira4-5. Sadly (for me) the mentions feature is being added to Jira5. That said it doesn't manage the watch list and a few of our clients prefer a mention to add a watcher.
Use: Include @username in a comment to notify and add "username" to the watch list. If they are already notified about comments then they may receive 2 notifications. -@username will remove "username" from the watch list.
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Under Logging and Profiling add com.praecipio.jira.plugins with level DEBUG. That should get you more output in the logs.
Looking back at the source code this will only work on comments (likely new comments). If you mention the assignee, reporter, or watchers they will get 2 emails as well.
This Mentions add-on doesn't provide the drop down of usernames, it was on the roadmap but when Atlassian added it to Jira I abandoned this project. You have to know the user's username to mention them ("Hey @cpepe, here's an email").
Mention notifications use the Jira notification system so a SMTP server is required to send the notification. If you have it disabled then you could check the mail queue in Jira to see if the mentions are being generated.
@username in a comment sends a notification to username. Notification uses the Comment template and the user may receive 2 notifications.
"@username" has to have whitespace around it or be the start or end of the comment ( OK: "@user1 this works fine, oh hey @user2", Not OK: "@user1-this doesn't, oh hey @user2!")