I also tested it. No, it won't detect cloaked NBs on it's own. However the set should improve the effectiveness of Magelight and Detect potions. At least it did in my testing.
I thought it was pretty pathetic with Inner Light / Expert Hunter, better with Radiant, and should be very good with potions. Whether that's worth slotting the set - I don't really think so. Detect pots, in particular, have decent range on their own.
What it may be useful for is when you are constantly re-casting Expert Hunter during a fight (as you have it on your front bar for the crit / damage), to prevent the NB from cloaking away as their health gets low. On the other hand this does not help when they are also using the shade.
One thing I regret not asking my test subject was their race and armor sets. Khajiit or Wood Elf, as well as certain armor sets, would skew the results.
If you are having trouble with NBs (who doesn't), consider Conspicuous Poison, which will let you see NBs for 10.5 seconds after you hit them, without them knowing that you can. This is for NBs you've successfully engaged, who are (always) cloaking away when their health gets low.
Consuming Trap (Soul Trap morph) is an underrated skill that gives you resources for killing mobs, and prevents NBs from cloaking.
If you are Nightblade yourself, Piercing Mark, and cloak yourself, are the antidotes.
As a DK, consider Flames of Oblivion, which shoots off a fireball as soon as an NB uncloaks. Surprisingly helpful for getting a sense of where they are coming from.