Yeah, the camo spell is exactly like the Octo-Camo system in MGS4, for sure.
And sadly, about people standing in stealth mode, it would be awesome if you could utilize the emotes like crouch/fall forward/etc. while in remaining in stealth mode, but you can't, so for anyone that spots a sneak, all they see is someone standing still.
It's definetely fun though when you can use emotes when in a party, since other players can see your stealthy RP.
~
Alas, though, we're straying off topic again. I don't think the topic really needs much more added to it, since the main points were addressed in the beginning, with the suggestion of having stealth fail under the condition of being knocked down.