Project Admins from the project-owning organization can control which users are seen by others in the project directory.
There are some members of a project who may need to be hidden for a variety of reasons. For example, very senior management. Hiding them means they can still view a project’s details but all their contact details are hidden from other users, making it difficult for them to be sent correspondence on the project. You can only hide and unhide users if you are an Organization or Project Administrator in the organization that owns the project.
You can hover over the eye icon for a tooltip confirming the directory visibility of the selected user.