Other people can See the you only exactly at the point you logged in, you are freezed.
You can walk and loot normaly, but other players are invisible for you too. You can walk very far away, if any other player slaps you at login point, you will get hit etc.
I tried it with a friend on several servers with several client restarts.
we could allways see eatch other only as freeze on login point. wenn we walked to some door, car etc i can see how my invisible mate opens doors etc and interact with the envoirement. he see it too. if i walked back to our login point he was still as freeze there. wenn i slapped him he got hit, but he was severall hundret meters away. for him, he got slapped by ghost.