It's used on a ward or charm, which turns it into a treasure card that can be used at that time in battle or stored in the sideboard for later use. When the cloaked-ward/charm is cast, the enemies can't see what was cast or who it was cast on. Cloaking is useless outside of PvP.
What it does: It makes a blade or shield/trap look greyed out with a ? on it and makes a distinct sound. You or any of your team cant see it. Only oppsing team. That is, you even are in PvP. If you played the game a long time ago, tower shield and weakness and balance blade i think made the same distinct sound. It is so they cant figure out what it is. For example, Life has like a kinda of soothing sound when any blade or ward has to do with is is casted. For storm is an eletric sound. It is pretty much a PvP thing or a show off seeing it is not often to see a sun symbol be casted seeing there are not a lot of sun spells