I have yet to see any Chameleon enchantments, over 3 characters, I just thought they removed it due to the glitch in Oblivion/shivering isle when Chameleon>35% made your armor invisible while still drawing the naked upper chest for both male/female
More likely it was yanked due to 100% Chameleon essentially being god-mode, since they
never reacted to anything you did, no matter how violent. Seriously; you could walk up to some dude and belt him in the face with a War Hammer, and neither he nor his buddies would give a damn.