I'm not seeing where the rules say you can't hide if you are lightly obscured. Can you point me to the page?
The description of lightly obscured even says that the perception check has disadvantage.
According to the list of things that count as lightly obscured is: dim light, patchy fog, or moderate foliage. This list is not an all inclusive list but gives you enough to make rulings on things that would potentially block your vision enough to make finding something difficult.
The wood elf ability adds to this list of things that count as lightly obscured but does not create a rule that stops others form hiding in a lightly obscured area.
Mask of the wild adds the following to the lightly obscured list (only for wood elves): foliage, heavy rain, falling snow, mist, and other natural phenomena. Again not an all inclusive list but sets the bar lower for wood elves and they get to hide in things that normally wouldn't block you from seeing that something was there. I also take foliage without an adjective to mean any type of foliage, particularly when it is less than moderate.
Gil