Do the lightfoot halfling and wood elf hiding racial
traits allow them to hide while observed? The lightfoot
halfling and wood elf traits—Naturally Stealthy and Mask
of the Wild—do allow members of those subraces to try
to hide in their special circumstances even when observers
are nearby. Normally, you can’t hide from someone if
you’re in full view. A lightfoot halfling, though, can try to
vanish behind a creature that is at least one size larger,
and a wood elf can try to hide simply by being in heavy
rain, mist, falling snow, foliage, or similar natural phenomena.
It’s as if nature itself cloaks a wood elf from prying
eyes—even eyes staring right at the elf! Both subraces are
capable of hiding in situations when most other creatures
can’t, but neither subrace’s hiding attempt is assured of
success; a Dexterity (Stealth) check is required as normal,
and an observant foe might later spot a hidden halfling or
elf: “I see you behind that guard, you tricksy halfling!”
Sage Advice Compendium v2.7 r2021