I must say, I really like it
It is very good to see this major source of frustration finally changed.
Currently on PTS, guard NPCs no longer instantly detect stealthed players in a 50m radius, the radius is now around 10-15m.
If you approach the NPCs from out of stealth, you'll still get aggro at 50m~ & attacked at around 35-40m~.
There's still room for improvement though:
Currently, the stealth eye indicator gives very little information that you're about to be detected. It doesn't open even a little bit when approaching the NPCs, until you're within that 10-15m, when it suddenly goes wide open & fireballs etc start flying.
It'd be great to have this eye partially opened when approaching the detection radius.
Also, I believe the stealth detection could still be made the same as other NPCs, meaning that you could sneak up on those NPCs if they had their backs turned to you, instead of somehow still spotting you. This would would make the experience much more pleasant for stealth focused melee players.