My interest in this is to hide the location of other players/mobs.
Having battlegrounds where you have no idea where the enemy is.
Mostly that involves getting rid of the radar and overhead map; possibly toggling off the onscreen-waypoint-monitor.
It would also be great to disable the /ui action cycleTarget* commands to prevent players tabbing through enemies, or at least making it LOS.
I also see a lot of possibilities for the server being able to remove a single-player dot - /stealth abilities for smugglers, /conceal for riflemen (as mentioned by the OP), pets with a phase-shift ability.
So, for the "area" effect it could just be certain areas of a map/certain cells that cause the maps to disappear, or it could be players in a group, or players "registered" for an event.
This is implemented in the CU client via packets, but Pre-CU doesn't seem to have any such feature from what I know. I discovered a packet variable that exists in Pre-CU (TANO visibility), but from initial testing it doesn't seem to function the same way as it does in the CU, unfortunately.
I'm not sure how it can be easily/tidily achieved otherwise.
It's all done through the actual client, so turning it off would 100% require injection. There's no UI or client file that affects it. Could we mod the exe to remove the function from getting called? Yes. Is it something a normal person can do, no. Other issue is someone could just run a normal SWG exe to turn it back on, so removing it from entire playerbase for a specific server is impossible.