So, the general rule of thumb has been that the only powers, abilities, and traits that are in play during a game are those of characters on the map, unless a power specifically states otherwise.

It's led myself and some others to conclude that a power like this...

NAZGUL: When Ringwaith uses the Split ablity or any character uses the Merge ability, characters with the Nazgul keyword are considered to have the name Ringwraith.

Only apply as long as there's already a FotR101 or FotR102 Ringwraith already on the map.

But then there's this...

FUSION: When a listed character is adjacent to all other listed characters and hits an opposing character, after actions resolve it may be given a free action to replace these characters with Gate Guardian from your sideline. When Gave Guardian enters the game in this way, it starts the same number of clicks from his starting line as the character given the action and modifies its combat values by +1. This trait is active even when this character is not on the map.
Suijin
Kazejin
Sanga of the Thunder

The Fusion trait only appears on YGO052 Gate Guardian. It doesn't appear on Kazejin, who's already been previewed. That means that Fusion is 'in play' even if Gate Guardian isn't on the map, but only in the sideboard.

So should traits like 'Nazgul' also be considered in play when the figure is in a player's sideboard?

Since it does not say "This trait is active even when this character is not on the map", I'd say that it is only active when the character is on the map, not when it is on the sideline.

Also, this language predates Yu-Gi-Oh:

THERE IS NO THOR ONLY TANARUS: If a friendly character named Thor of equal or higher points is not on its starting click, you may give that character a power action and replace it with Tanarus the same number of clicks from his starting line. This trait can be used when Tanarus is not on the map.

Oops, I missed the 'not on the map' clause in the Fusion trait.

Nazgul feels so left out