From The Heroes of Might and Magic III wiki

Class	Air Magic
Basic cost	4
Duration	One day
Level	2nd

Masks the hero's units on the Adventure Map.

Note: In at least earlier versions, "One day" meant that the effect ended upon hitting "End turn". This made this spell totally useless. In the patched SOD, the effect will last until the end of the last person's turn, thus making it much more useful for players in the early part of the turn (starting with Red). Vs. the higher level AI, however (Expert/Impossible) the spell is completely useless, as the AI is able to see the true strength of the army in question, and react accordingly. Additionally, Disguise helps against an enemy trying to view you with Visions. He will still see your fake numbers, but not what troops you have.

Level	Effect
None	All troops are shown as the most powerful in the army
Basic	Cost reduced by 2
Advanced	Troop quantities displayed as "0"
Expert	All troops are shown as the most powerful available in the color's longest owned Town