Back in the day, my school required the foam helmet, gloves, and foot protection, plus mouthpiece. Shin guards were recommended, but not many students had them because they were actually quite expensive relative to the other gear. After a very painful collision with another student's shin, I bought the shin guards. Every rank did free sparring and we did light contact, and head shots weren't allowed. We had a four week rotating schedule of kata, weapons, fitness conditioning, and sparring, so we sparred every four weeks.
My current school is definitely not big on sparring. We do 5 and 1 point sparring (basically working with a partner defending against a series of 5 or a single attack) on a regular basis, but rarely do free sparring. I have observed higher ranks free sparring (no gear and little to no contact), but I think they avoid having lower belts free spar because they don't trust us not to accidentally punch someone hard in the face.
For the college class I visit, there is sparring from time to time when the Kenpo guy leads the class. It's gear-free and light contact, and I also think that it's a mistake. Most of the students have little to no karate experience and very poor control over their bodies, and some of them are reckless and have no concept of adjusting their fighting style to accommodate opponents with differing skill levels. But so far no one has been seriously injured.
Ok, I need to ask - why is chest protection optional for men but required for women? I didn't think breasts were really an issue in terms of potential injury.