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While I agree that it can be extremely frustrating, consider this side of the coin:
Those who are NOT good at PvP, those who have terrible connections, those who would most likely lose every battle, even if they were running the most effective template of the day, would probably pack up and leave if they did not have the small amount of safety that stealth offers them.
While I, personally, would like to have stealth and hiding made far more difficult to use, have all but one guard zone vanish into thin air, and have player-run towns become the order of the day, I have to think of the overall impact.
Passive detect is utterly insane. There you are, using a skill that you have utterly mastered - you are legendary in the skill - and a chicken - the ultimate bird-brain - pops out of a bush and reveals you. Now, apply that same scenario to ANY other skill, and tell me you'd put up with it.
You're in mid-battle, with your legendary fencing, anatomy, bushido, chiv, etc, and along comes a cat. BANG! Your sword explodes, your leggings fall down, and you suddenly can't hit the broad side of a barn. You die, horribly, to a passing noob with 10 points of skill in tailoring.
Tell me you'd put up with that?
However, that's not to say stealth isn't silly in of itself. If I walk into 'something invisible', I should have a chance to grab it, and find out what it is. If I'm moving around in that state, I should have a chance to 'make a rustling sound to the south' or something to tip off others that I'm nearby.
But, passive detect? Go away.
Which is exactly what I'm about to do. Have a good day, Siege. I'll die to most of you this weekend!
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You asked me for a scenario... a hidden tamer kills you with an all kill and presses a hide/smokebomb macro.... you die.... you lose 720 skill... you dont need to have stealth to play, like many have said there was a time long long ago when people didnt have too.... funny thing is 85% of them are blue and have nothing to hide from but pks.. :/ this is going nowhere but it was more of a statement than anything else.