That's a fine interpretation and ruling, as long as you and your table are good with it. You won't find support for it in the books, however.
Yes you do, and I've literally just spent the past 5 pages explaining it.
Ill go again. The problem isnt with the rules, or that they dont exist; its with differing interpretations of that RAW.
Gamist interpretation vs Common sense plain English (the latter of which the rules were intended to be interpreted as).
The rules state you can not attempt to hide when being observed, and most creatures are assumed to be alert to danger and generally aware of all (non hidden) threats around them. Check.
You're imposing an artificial parsing between a persons movement/ ducking down into cover [move] and [the Hide action]. I say this artificial parsing doesn't exist in the text (you're reading/ inferring the parsing into the text by interpreting
plain English 'hiding' as meaning
the game mechanic term 'the hide action').
I interpret the RAW of 'you cant hide when being observed' as meaning what it means in the real world in (say) a game of hide and seek.
In other words, I don't care if you crawl into full cover (say into a cupboard) with your movement for your turn while under direct observation, and then use your free object interaction to close the door (gaining full cover).
Simply breaking LOS doesn't render you able to take the Hide action once you close the door. The rule is you cant hide while being observed. You were observed on your turn
going into hiding. As you were observed going into hiding, I know where you are (and am objectively correct in that knowledge),
so you cant do it.
I saw you go into hiding, so the precondition for the Stealth check to Hide is not met. No roll allowed, total cover or otherwise. I know where you are, and no amount of anything you do in that cupboard is going to remove object permanency from me, or make me forget where you are. I wont be startled to open the door and see you there, you wont get advantage for throwing the door open and shooting me, and you're certain to lose your game of Hide and Seek.
Get it yet? Because I am getting sick of explaining it over and over defending the same accusation from people that dont understand what I'm saying. Read the above paragraphs and re-read them. At least make an effort to understand the argument so you can at least then take it apart instead of repeating something false that I have already rebutted (I'm ignoring RAW). I'm not ignoring RAW, we just have different interpretations of it.
Mine makes sense. Yours doesn't.