Yes, that player is using "Vanilla tool" (Google it), the most popular hack for Aion since launch. Hackers use this tool discreetly to gain small advantages, like being able to see players in hide.
However, the ability to see "hidden" players is a double-edged sword. This post sums up what can happen - tab targeting can go on a hidden player, exposing the hacker. The go-to explanation is that it's a "bug". Hacks are hard to prove, and bugs are hard to disprove. That combination makes a perfect excuse for all hackers.
Conclusion is - it's hard to oust discreet hackers. If you can't