This perk will highlight all hostile enemies in red while the player character is "actively aiming". This means using iron-sights or a scope. Enemies will glow green instead of red when using a night-vision scope. This makes enemies easier to spot and attack, especially at long distances or at night. This perk does not, however, highlight cloaked enemies, such as nightkin.
This perk and ED-E's Enhanced Sensors perk work well with each other, as Enhanced Sensors will pick out enemies from further away than the player character's normal Perception.