Or perhaps the technology is one and the same: it can create visual illusions of foreign ships, or it can create visual illusions of empty starfields.
It's just that those visual illusions fall apart when subjected to even relatively primitive sensor scans. An example of such primitive technology would be the devices provided by Daniels - advanced by mid-22nd century human standards, perhaps, but so primitive nevertheless that all the opponents of the Romulans would have them by the latter half of the century, rendering the projection technology useless.
If so, the Romulans would have a good reason to include the no-cloak clause: their enemies would not find it a bad bargain, given the low value of cloaks extant at the time, but the Romulans would buy time to develop a more perfect invisibility screen while ensuring that the enemy efforts at developing countermeasures would go on back burner for a while.
This as such still contradicts "Balance of Terror" where the historically savvy Stiles claims that the identifying characteristic of Romulan ships is their birdlike warpaint. By all rights, the identifying characteristic of Romulan ships should be that they look like other ships or empty space! However, "Balance of Terror" is the only piece of Star Trek that claims that invisibility devices were a novelty and a rarity. In other episodes of TOS, let alone the spinoffs, invisibility is taken for granted, and it is readily accepted that it comes in a number of varieties, of which the Romulan technology is but one (and not necessarily the first).
That's the dilemma here: "Balance of Terror" is the one sore thumb sticking out, and makes little sense in scifi terms overall - surely invisibility would be a routine occurrence for our intrepid space adventurers already? But "Balance of Terror" is also a good episode, better than many other invisibility-themed ones, and something I'd hate to erase from Trek history even if I could.
Timo Saloniemi