From what I understand, it culls the objects at a closer range. That doesn't mean the objects are GONE. Your round still stops at the tree rather than at the target. It also makes targets disappear at closer ranges. The shot you posted was pretty close range. If you go out further you won't even see GVs that are there. You might get popped by a camper you cannot see because he's outside your vis range.
So it's not some uber exploit. It has its drawbacks. Not the least of which is you're giving your position away by firing at a GV, only to have it hit some invisible tree or something.
Skins is not an exploit. If a GV is far away you see it as a dot. Dots are visible regardless of the skin. Once it's in range close enough to see the color of the skin, I promise you the color of that skin isn't going to determine the outcome of it. If the enemy is moving you can see them. If they're camping (90% of all situations) it doesn't matter what skin he has, he's behind your spawn most of the time. He's camping, not easily visible, firing through shrubs or behind a tree or whatever. The skin color isn't going to be a blinking "SHOOT ME" sign.
Skins are an option. Not a requirement. Some folks have just as much right to disable skins, as I have to make myself MORE visible by flying the most gaudy skins I choose. Herringbone C205? Check! Bulgarian 109E? Check! These make it easier for the enemy to spot me and kill me, but it's not an exploit, it's just a choice.
Disabling skins is no more an exploit than taking a panzer instead of an T34. It's a feature, not an exploit.