https://youtu.be/z_mxR4CYlJ0
There were/are plugins out there that take care of this seperately, but they haven't been kept up to date, and have been causing issues on many servers. Perhaps this is something that should be included with the "Vanish" plugin, as it seems to be an implied thing that isn't included already. But making it NPCs cannot see vanished players. This seems like something that anyone would assume be a part of Vanish already.
Merged post
I actually just noticed that it IS supposed to be a feature for this plugin. But seems to not be working right now. Any chance on fixing this?