Camo Cloak is a premium gear that fits in your Left-hand gear slot, does damage against Ground enemies, and gives you a chance of being invisible for a few seconds at the start of a room. During this period no enemies will shoot at you, and enemies that charge at you will remain still (e.g. the drone boss in W10), but enemies that move randomly around will still move.
Note that teleporting bosses (from W3 and W11) will keep disappearing and reappearing until the cloak wears off, and if your decoy skill triggers during this time enemies will target the decoy and this can result in stray bullets heading your way.
The chance of the cloak proc’ing on the rarity: