I think you're looking at the problem from the wrong angle. Far Hide isn't supposed to be a 'Predator cloak' or make soldiers literally invisible. It's there to prevent players from gaining an artificial advantage by simply setting grass rendering to minimum.

Look at the left side of the screenshot: the soldier is already difficult to see, but if you reduce the grass rendering, you can remove most of the vegetation that would realistically be providing concealment and spot the player much more easily. The person hiding there hasn't become more visible in reality... you've simply changed what your client renders.

In an actual military environment, if someone is crouching in tall grass, that vegetation doesn't disappear because the observer decided to use a lower graphical setting. So from a milsim perspective, I actually think the idea behind Far Hide makes sense.

If the current implementation covers the uniform and gear too much, then sure, the shader should be tuned. But that's an implementation/balance issue, not a reason to remove the feature altogether. The goal should be to preserve a reasonable amount of concealment regardless of graphics settings, while still allowing players to identify friendlies and enemies at appropriate distances.

Calling it 'sci-fi optical camouflage' seems like an exaggeration. It's not making the soldier invisible, it's preventing a graphics setting from completely removing the vegetation that is supposed to conceal him.

In the video, you can clearly see that it does give you when you drag documents in it.

This mechanic was originally implemented because many people were abusing the Game Master to see enemy positions during base attacks.

However, once it was introduced, the result ended up being worse than the original problem, since some players now abuse this mechanic not to attack the base, but to prevent bot spawning and construction inside it.