A lot of people tend to think this is a gimped feature and has broken invisibility all together. But I don't think so. I actually thought it was OP in the older games. Of course, the detection system was different too.
Have you noticed when you pop an invisibility potion that for a moment, their detection lowers? It just gives you that last chance to escape. But for low level sneaking players, it doesn't work easily.
I myself never started using the invisibility spell until I mastered illusion. I normally popped invisibilty potions and cast muffled movement. When I play a mage, I inevitably build up Alchemy skills too for Destruction potions. So I have good skill with invisibility potions too.
I also look at invisibility to be used with a combination of illusion spells besides muffled movement in case your illusion spells are too low leveled for certain enemies.