Can you see me if I'm on the other side of an opaque wall? No, so I can hide behind a wall, or a wide column, or a large statue, etc. Does the rule really need to explain that?
The rules state that you can't hide from someone who can see you. That is not "rulings not rules". It's a rule - and by the traditions of D&D a rule that is very punitive to thieves/rogues (because in 1st ed AD&D and in 4e, a rogue who takes up a hidden position can then remain hidden even if others can see him/her provided that (in AD&D) s/he remains motionless in the shadows or (in 4e) retains at least partial cover or concealment).
On its own it's not confusing, just strict. But it is confusing when read with reference to the concealment rules, that don't mention cover, and then the cover rules, which mention a type of concealment that is not mentioned in the concealment rules. Those rules could all be better written.
More confusion arises when the rules say that you can hide from someone who can see you but is distracted. Because that is a direct contradiction of the rule "You can't hide from someone who can see you".
And yet more confusion arises because, in the real world, people can hide from people who can see them (eg by using camouflage while remaining still), so it makes no sense that in the D&D world that is impossible unless you're a wood elf.
"...under certain circumstances, the Dungeon Master might allow you to stay hidden...". That wording clearly puts this into the realm of a particular DM's allowance at a particular table of players, depending on circumstances. It's meant to support an exception to the "can't hide from a creature that can see you" rule
If it's meant to do that, it would aid clarity if it stated that that was what was going on.
Just to give one drafting suggesion: there is a huge difference between "You can't hide from someone who can see you" and "Ordinarily you can't hide from someone who can see you, but sometimes you can eg if they are distracted, or if you are camouflaged."
I'm not sure why the problem of interpreting the rule exists. It seems perfectly clear to some people, and greatly unclear to others.
I've given a few reasons: the rules contain a contradiction ("You can't hide from someone who can see you AND you can hide from someone who can see you but is distracted"); the rules refer to concealment but not cover but seem to rely on cover as much as concealment, and the cover and conceament rules themselves do not interface very smoothly; the rules seem to state as impossible something that in the real world is possible, namely, hiding from people who can see you by remaining still and relatively camouflaged.
I don't get this last comment. Can you explain?
The contradiction with "infinite variety" I have illustrated above: there are ways of writing rules that permit infinte variety, but using blanket statements that "You can't hide from someone who can see you" is not one of those ways.
The contrast with the Hermit class feature is that the rules for hermits clearly point to a procedure for determining, at the table, how the hermit's discovery is to factor into play. The stealth rules don't. You cited this paragraph:
In combat, most creatures stay alert for signs of danger all around, so if you come out of hiding and approach a creature, it usually sees you. However, under certain circumstances, the Dungeon Master might allow you to stay hidden as you approach a creature that is distracted
These rules don't explain how the GM's discretion in respect of distraction interacts with the earlier stated rule that "You can't hide from someone that can see you". So the table is left to try and work out what is going on, factoring in the rules about "can't hide from someone who can see you", the rules about distraction which are based on GM discretion and seem to contradict the first rule, the rules about wood elves, etc. In my view it's a mess.