You opened up a can of worms between what I would call literalists (like yourself) and pragmatists (like myself). There's nothing wrong with either style.
Literalists go by the book, the whole book and nothing but the book. Since hiding causes you to be undetected, you make the assumption that the only way to be undetected is to be hidden.
Pragmatists use the book as a starting point and then apply real world logic. So dragons fly, people have hit points but if the rules don't explicitly state how something works, we assume that things would work like they do in the real world. The rules don't state anywhere that creatures automatically know where everyone else is if they are not hidden, so we don't make that assumption.
It's not home-brewing. It's not house-ruling. It's not about RAW (which IMHO is a meaningless acronym). It's a different approach to the interpretation of how to play the game. That's all.
