The armor is a form-fitting armored jumpsuit, with stealth camouflage system embedded. It generates a modulating field that transmits the reflected light from one side of an object to the other, making a person much harder to notice (but not completely invisible). The technology was the basis for the unstable "Stealth Boy" wrist units developed in the U.S.
It can only be obtained after the Operation Anchorage simulation. It is in the armory which can be opened after completing the simulation. This is the only one throughout the game.
The stealth field activates whenever the wearer sneaks; this is true even if the wearer is a companion or a regular NPC.
The stealth field bonus does not appear in the Pip-Boy unless crouching when looking at it. Otherwise, the only bonus shown is +15 Sneak.
The clear, see-through texture produced by stealth armor is slightly different than that of a Stealth Boy, and can be compared by hot-keying a Stealth Boy, and activating it while sneaking.
Behind the scenes
In Chinese, Hei Gui can be translated a few ways: Black Demon, or Black Ghost, with the second being more likely, given its intended use.
If the armor breaks while the player has the stealth field activated, there is a possibility that the stealth field will stay active even after changing to a different piece of clothing or exiting sneak mode. This can be fixed by repairing the armor and toggling sneak mode while wearing it or loading an earlier save. [verified]
When a companion has the armor equipped and is crouching (activating the stealth field) you can trade items with them and swap the armor with another clothing article and when exiting dialogue the stealth field will remain whenever the companion is crouched. This is useful if you want to sneak through areas with a high concentration of enemies (such as Evergreen Mills) without the possibility of the death of the companion. [verified]
If you pickpocket a stealth suit from a Crimson Dragoon, the stealth field will not activate when crouching, and the suit's stats are identical to those of the recon armor. Additionally, it lists under effects on the Pip-Boy as "Initiate's Armor". [verified]
While performing the perk "Mister Sandman" with the stealth suit the lower part of the suit will be detached from the player character's skeleton. [verified]
When picking up the armor, it will spin when being held, making full circles, until it is dropped. This may be due to selecting the rounded faceplate of the armor when it is on the ground, selecting the back or bottom of the armor allows it to be moved normally. [verified]
If you stare at the ground and swing a knife while crouching in first person view, a part of the suit will clip into view. [verified]
Sometimes when equipping enclosed headgear like a power helmet, switching to the stealth armor, and removing the headgear will seem to have made the player character's head vanish. [verified]
To fix this bug, remove the helmet and the Chinese stealth armor, and then re-equip it again and the helmet should be back.
↑JonahLobe on Reddit: "For F3, I made: -Ants -Ant Queens -Radroaches -Radscorpions -Deathclaws -Feral Ghouls -Glowing Ones -Supermutant Overlords -Mirelurks -Aliens -Yao Guai as well as random equipment, armor (like Chinese Stealth armor), etc"