Yeah it can be irritating, but it should actually be improved. What it SHOULD do in addition to +10 hide is reduce the sight radius of enemies to you.
i dont think this is actually done at the moment, unless you're in hide mode.. camo would sort of let you do a visual hide without going into stealth mode.. this is how it should function. Doesnt change your move silently, they'll still hear you move or hit something.
But you could get close without them spotting you visually. Not sure if hide vs spot happens at all when you're just moving around normally.
Creatures should be hearing you but not seeing you.. so they'd go into investigate mode... go see what it is and check out the sound. then they may well see you because they're closer.. A bit like a poor man's invisibility, since the creatures wouldnt swing near you until right on top of you with invisibility. They may well SEE you earlier with camo.
That way people may actually want it cast on them in particular missions...