Isn't the problem here that the fact there there is a debate at all is indicative of the rule being a tad silly in the first place? I'm an average height human male but someone three feet tall (or thereabouts) standing behind me would not be hidden from view from anyone standing five or even ten feet away from me unless neither I nor the person behind me was moving at all and, further, that I and the person behind me were standing with our legs together, at a minimum. Sure, give the short person skulking behind me a cover bonus but a hiding bonus? Someone upthread mentioned peekaboo and I think that sums up how ill-considered this idea is.
No, it's not the end of the world. I do think the OP seems to be interpreting the rule correctly and I have no axe to grind with 5e. I'm liking it a lot. But this rule in particular? Nothing said so far seems to justify it to me.
Edit: all right, maybe not human but medium, in D&D terms.