Hriston
Dungeon Master of Middle-earth (He/him)
You are correct. 'Hiding' (as in passing a stealth vs perception check while meeting the conditions to hide - not clearly seen) does not remove any knowledge from the observer. If you hide, then don't move, and your observer has no reason to believe you've moved and reason to believe you could not have moved then he knows your location. But until he does something to reveal you (such as move and look in the box) then you are still 'hidden' (unheard and unseen...not observer has forgotten you exist)
When something reveals your position, two things happen: 1) your location is known, and 2) you are no longer hidden. Coincidence? I don't think so.