The Cloaking Device lets you sneak around by making your mech nearly invisible, though it has limitations.
Select the Cloaking Device and you'll automatically cloak. Select a different weapon to uncloak. Trails still show up if you're going fast enough.
In zero gravity, your thrusters will still show up. So if you think someone is looking in your direction, try not to press movement keys.
In normal gravity, dust trails and other effects still show up, so limit your movement when you think someone is looking in your direction.
Taking damage will make you flicker pink.
(guides for this item will be linked here)