A player can become invisible to one player but visible to another. When a player becomes invisible, their character (when viewed from a different person) is stuck in one position on the ground moving about mimicking the actions of the invisible person (Running in place, punching, eating, etc.) However, on the invisible person's screen, they appear perfectly normal and have no way of telling they are invisible. The invisible player's avatar may be in different spots for different players and if damage is dealt to the avatar, it will affect the invisible player wherever he is.
My first experience: I first noticed this bug when a friend of mine went to attack a geared player with a weapon in a house. He started axing the guy who immediately ran a few feet away into a room and began to bandage (thinking he was getting hit from the outside), while my friend stood in front of him continuing to axe him wondering why he was behaving so strangely. This continued with the confused player running and looking around trying to figure out where it was coming from until he died.
Second experience: My friend and I were on top of the new police station and I was looking down the spiral staircase. All of a sudden, my friend begins shouting there was a man running up the stairs with an axe yelling at me to shoot. I could not see anyone walk up the stairs and begin getting axed. I ran down the stairs while this invisible person was behind me axing me. I could hear his footsteps and the axe hits but nothing else. I consequently died.
The third experience I captured with video. My cousin became invisible to me and one of my other friends who reported the avatar in different locations that what I was seeing
My friend's avatar is stuck in this position and mimics everything that he is doing on his screen. He was running around in the field by the firehouse in Elektro. As you can see, he picked up a white hard hat from somewhere and it appeared on his avatar. I also had another friend playing who was seeing this avatar in a completely different spot.
I then ran outside and told him to punch the bus stop wall. He is directly in front of me punching it and you can clearly see and hear it but his avatar is still in the building to the left of the screen.
I ran back up to check his body and it moved into that corner.
I punched him to see if it would wound him on his screen and sure enough it did.
Then his avatar made its way out of the building and stopped in the street. He was punching the zombie near the firehouse in the next video.
The invisible man punching the zombie yet his body that I can see is just outside the building.