Updated

Your problem is that the event isn't connecting to the function properly. It's inside of the function which never gets called, so it doesn't ever connect to it.

To fix this, we simply need to move the connection outside of the function like so: (Put this in a LocalScript)

local GUI = script.Parent.Parent

wait(5)

for i=0,1,.1 do --Same thing for fading, just requires much less lines. More efficient :P
    GUI.BackgroundTransparency = i
    wait(0.1)
end

GUI.Active = false

Ok, so I believe it should work properly now.

If you have any further problems/questions, please leave a comment below, and I'll see what I can do. Hope I helped :P

-Dyler3

You should always place your connection line outside of the function block, And lines 8-26 can be shortened if a for loop is used.

A For loop?

A for loop has an iterator that is supposed to keep track on how many times the for loop is to run, for Instance.

for iterator = begin, last , increment do -- the begin is where the value must start, the last is where the value must end, and increment is the amount of decrease/increase.

for i = 1, 5, 1 do
    wait(1)
    print("Amount of Seconds remaining "..i)
end

-- > Amount of Seconds remaining 1 , Amount of Seconds remaining 2. Etc.

Final Product

function onPlayerEntered(swag)
    local GUI = script.Parent.Parent
    GUI.Parent = swag:WaitForChild("PlayerGui")


    wait(5)
    for i = .1, 1 ,.1 do
    wait()
        GUI.BackgroundTransparency = i
    end
    GUI.Active = false
end

game.Players.PlayerAdded:connect(onPlayerEntered)