"If you replace the water with light then you would not see that there was something present because the light is guided around the person or object. You would see the light coming from the scenery behind as if there was nothing in front,"
Interesting analogy but in water there is visible turbulence might not there also be with light similar to gasoline vapors? The invisibility shield in the Predator movie comes to mind. Very good but not perfect invisibility.
That would be similar to a mirage effect if the light has turbulence due to atmospheric interference. I would not mind having a "predator" type shield.