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Your unit is invisible on the strategic map. I believe it doesn't work within sensor range of someone's colony, but aside from that + mods and abilities that provide detection, you're invisible. I haven't found a way to really take advantage of it against AI, and I doubt it'll ever be great against them, but it must be fun in PvP. Syndicate mirage makes your whole stack invisible in rough terrain, so I stole a Vanguard mountain sector earlier and vanished into thin air, but his AI galaxy brain probably tells him exactly where I'm going.
 
Thankyou, that was a pretty complete answer. I was unsure of what was going on because I kept seeing these enemy units that said they had Camou, which... didnt seem very effective if I could see them.

TBH I couldnt even tell if it was supposed to be a boon for the Strategy map or Tactical battle.
 
Be warned that moving next to any unit also breaks the camouflage.

Also if it is terrain dependant camouflage, it might not work if they move around in a sector.