What does 'Hiding' a Collection do?

First - what it does not do! When you hide a collection it doesn't hide the products within that collection. They will still be displayed under 'Shop All' and any other collections they are listed in. All hiding a collection does is remove the link to that collection from the navigation menu in your store (both your custom store and your marketplace store). It just means no one can see or click to get to the collection.

So what is it for, then? This feature was added to allow theme designers to add cool features to their themes. For example, you might want to have your homepage display a gallery of your newest or best-selling products. You would need to create a collection for those products but you might not want a link to that collection to be displayed in your navigation bar.