I want to come back to this for a moment because I’m not quite sure my initial reply quite covered how bad a change this would be from the standpoint of players who dislike AFK cloaking.
AFK cloakers use local as a weapon, and space owners use local as a shield. (There are other use cases obviously, but these are the two I want to focus on.) This change, removing cloaked ships from local and barring cloaked ships from seeing local, would totally up-end the current dynamic.
AFK cloaking, the deliberate use of cloaked ships to reduce the economic activity of a system based on the perception that the occupants won’t undock with a hostile in local, would totally cease to be a useful game mechanic. It simply wouldn’t work anymore because you can’t scare people who can’t see you. So, victory for the local space owners, right?
Wrong. Oh so wrong.
The second part of that equation, using local as a shield, would go away too. Tracking cloaked hostiles across systems would become virtually impossible, especially if said fleet was smart about how they moved (i.e. staggered system movements, use wormholes, send stragglers to other systems, etc.). In order to maintain the same level of situational awareness, you’d need players (uncloaked players mind you) watching every single system in and around your space taking perfect notes on every face that pops into local for just a second (EDIT: 30 seconds as per the suggestion, but still) before they cloak. The only other way to know that you’ve got hostiles in local would be the more traditional “flaming datum” (i.e. they start shooting). And to top it off, this cloaked fleet would be able to operate almost exactly as they did before because they don’t need local to do their jobs. D-Scan and the giant, warpable beacons of asteroid belts and anoms make sure of that.
So, yes. This change would totally stop the passive loss of ISK due to AFK cloaking, but it would also certainly increase the active loss of ISK due to ships getting exploded and make “owning” space in nullsec a lot harder and less safe.
Of the vocal subset of players won’t undock when their perfect shield of local tells them its unsafe to, how many do you think would undock knowing that their once perfect shield barely provides any protection at all? I highly doubt they’d support this change.
And for the record, yes, I’d be all in favor of this change because anything that makes gameplay more engaging and results in more ships getting exploded gets a huge +1 in my book.