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Yup. It's been doing that since the 'Stamina' update was introduced; not to mention being able to walk through the mineable stamina stone or w/e it's called.

I thought the same exact thing the first time I had my Warrior with his armor go invisible. I had my Berserker Armor and found it quite annoying having it stealth every few seconds. The increase in stats is great and all but the invisibility, meh. It would be nice if something could be done...