My Lone Wolf relies heavily upon the Smoke Screen provided by burning oil/ooze, which to my understanding cuts off all Line of Sight through it. Archers, when they hit, are hitting with direct arrow shots straight to my undercover rock through the Smoke.
The times that Sneaking with smoke has consistently failed me is when I am next to an enemy in Melee range and I Midnight Oil -> Fire myself (to generate smoke) -> Sneak with the enemy immediately next to me. In those cases all of the enemies can hit me including the melee units.
I feel like enemies know where your last known position is, and if you actually are there then they are capable of hitting you (and if not, they don't do anything). The problem is that archers are still hitting me during some fights through smoke even after I have moved after entering Sneak mode.
Most of the time I am able to pick off enemies without them knowing where I am. It's just the few times that the Archers notice where I am through the Smoke cloud that I have to restart the fight.