My feeling on this is that the Treaty probably only prohibits ship mounted cloaks? I know the cloaked encounter suits pop up a few times in the Post-Nem novels, in DTI: Forgotten History for one.
Honestly that's kinda my take on it as well. The Federation tends to focus on superior sensors, but they also utilize stealth tech that doesn't make a ship invisible and that seems to pass muster as well when the Treaty is mentioned.
The thing is, there's much more to cloaking than just making something undetectable in visible light. The holographic encounter suits used in Insurrection
are just meant to fool the eyes of pre-industrial native peoples; we're shown outright in the movie that they can be detected by sensors, presumably in infrared and the like. The books have established that they can block life signs too, but concealing a ship in space is a much more difficult proposition, because of the laws of thermodynamics. Contrary to the "space is cold" myth, vacuum is an insulator. There's nothing to carry heat away from a spaceship except its own thermal radiation. So any ship in space is going to have a heat signature that's hard to conceal. If you block it from radiating outward, then your ship overheats and you die. And you can't really transfer it somewhere else, because, again, there's nothing but vacuum around you, no handy ocean or ground to dump your heat into. So basically any ship in space with a living crew and active power systems is going to be thermally detectable, period. Trek cloaks would have to have some pretty weird superscience coming into play to get around that basic problem. It's a far greater challenge than just blending into the scenery.
(And really, being invisible in space is pretty easy -- just turn off your lights! It's dark out there! Visible light is simply not the key issue when it comes to cloaking spaceships.)
Also, "Balance of Terror" established that starships have something called "motion detectors," sensors that could detect the motions even of a cloaked Bird of Prey -- although later generations of cloak clearly found a way to hide from those sensors. How do you detect the motion of something in vacuum when you can't see it? Short of detecting very subtle disruptions in the tenuous interstellar medium, the most likely approach would be some kind of extremely sensitive gravity-wave detector picking up the waves created by the moving mass of a ship. (In reality, gravity waves are incredibly hard to detect unless they're immensely powerful, but maybe a ship with warp coils would create more forceful gravity waves when it moves.) It would take still another kind of magical superscience to cancel out the effects of a ship's mass (although not too different from the kind that the TNG Tech Manual
posited is involved in impulse drive, reducing the inertial mass of a ship to make it easier to maneuver).
In short, a ship-cloaking device would need a lot more going on than what you'd need to make a person invisible. So personal invisibility shields wouldn't fall under the treaties that affected ship-cloaking tech, any more than a commercial satellite-launching rocket would run afoul of ballistic-missile treaties.