This problem has been fixed in v7.4 complete.  the option 'Show selection wireframe on top' is available, and when you un-tick it hidden objects are actually hidden. (And if you want the wireframe -tick the option). Everyone should be happy. Hurray for e-on!

"I paint that which comes from the imagination or from dreams, or from an unconscious drive. I photograph the things that I do not wish to paint, the things which already have an existence."
Man Ray, modernist painter
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