The cloak option would only work once, as I stated that it would be easily introducable, that skills do not cool down in this kind of "soft" out of combat mode.
Sure you could use potions, but if you keep using potions in every fight, it seems like quite a lot of effort, and I am sure there are already other potion exploits that don't really lead to the game being broken until you force it.
If the game allows attack then hide (not at risk) then repeat you win every combat.
Plus if you can leave then return to combat you can get infinite turns...
So can be hard to balance
Well neither of these are true. If you enter combat after sneaking you only get that one action and will be placed at the end of the turn. So every enemy gets their turn until you can use yours. They can move in too close, stun you, kd you etc. Alright, you could stay in sneaking until the end of the round, use your attack, sneak again, adding to the boni that you become basically unkillable. I can see that this would be an exploitable tactic together with glasscanon, making the balancing not so obvious anymore.