What do you mean invisibility doesn't prevent mobs from seeing you? I thought that was what it is for. In fact, I tried it and invisibility does prevent mobs from seeing you (http://minecraft.gamepedia.com/Status_effect , see Invisibility. It does note that some mobs see players regardless, that is not an intended feature.) until you either hit or rub up against them. However, invisibility also does not work with Ocelots, and I believe this is what you meant by saying that this is a known bug. Apparently invisibility only works on hostile mobs.
What do you mean invisibility doesn't prevent mobs from seeing you? I thought that was what it is for. In fact, I tried it and invisibility does prevent mobs from seeing you (http://minecraft.gamepedia.com/Status_effect , see Invisibility. It does note that some mobs see players regardless, that is not an intended feature.) until you either hit or rub up against them. However, invisibility also does not work with Ocelots, and I believe this is what you meant by saying that this is a known bug. Apparently invisibility only works on hostile mobs.