Something worth noting is that the rules originally as written worked against all types of units, including conventional infantry, and that at one point during the Warrior Trilogy, it is specifically noted that Morgan's Archer should have been struck by weapons fire (as in Dan Allard watches a stream of tracers running straight into his chest) but simply wasn't. The only time Morgan would have been hit during the course of the book was during the training fight where Dan used a program to take his and his mech's perception of his opponent completely out of the equation, by telling the computer to shoot at the source of the medium laser fire.
While the conventional infantry thing could have been an oversight or a deliberate choice not to think about it as hard, the scenes in the warrior trilogy definitely hints that it's more than just being "harder to hit".
Take that how you will. Maybe phantom mech isn't just mucking with sensors. Maybe it's also mucking with people's perceptions, so that even a rifleman without any sort of electronic assistance or an experienced mechwarrior watching it through their cockpit glass is somehow affected. Maybe it just no-sells hits sometimes.
(Or if someone wants to tone it down and make it seem less weird, maybe we ignore those parts)
Also for what it's worth, here's the port I wrote for the "And I feel fine setting", which mostly directly copies the rules with some adjustment for rules changes and the setting. In this case it is explicitly overpowered in a way that actively terrifies people.
For the purposes of target movement modifiers, a mech piloted by a pilot with phantom mech is always treated as though it has moved at least ten hexes, unless it has moved further than that. The mech is also treated as being at twice the range it actually is, and opposing units gain none of the benefits of a targeting computer or C3 Network if targeting the pilot's mech.
Active Probes, including Beagle, Bloodhound, Watchdog, or Nova CEWS, will not detect a hidden mech piloted by a pilot with phantom mech. Streak SRM or LRM launchers will normally refuse to target, and therefore fire on someone using phantom mech, but may be overriden with a standard piloting check (or computers if using the RPG rules), in which case they function as standard SRMs or LRMs for the remainder of the scenario. Artemis IV, Artemis V, and Apollo FCS provide no benefit when attacking someone using phantom mech.
The pilot gains the benefits of a targeting computer, which does not stack if his mech already has a targeting computer.
Phantom Mech functions only when the pilot is piloting a mech of Hegemony (Bastion) manufacture, or a mech manufactured in the Terran Hegemony before the fall of the Star League but after the Reunification War, or one that has been properly retrofitted with a DI computer of hegemony origin. Though swapping out DI computers is a trivial matter, installing one properly to allow phantom mech to function requires a technician with actual knowledge and experience in the ability and what it requires, and requires 200 minutes and a technician skill roll at a +6 tn modifier, with a partial repair value of 2. A partial repair result indicates a DI computer that is incorrectly installed and actually imposes a +2 penalty on all piloting skill checks and does not allow for phantom mech to be used.