I had a situation in a recent game that I thought was straightforward, but my party disagreed with vehemently; I'm hoping the community will be able to provide some wisdom for how the rules should work.
My players were fighting a stealthy foe, and all PCs and the NPC were in the effect of a smoke grenade (concealment, choking effect being ignored due to armor). The setting is on a space station, with the party around the corner from and ahead of the foe when the grenade went off, so the entire relevant battleground is in the concealment effect and the party could not see the foe when the grenade was thrown (he was behind them because of a separate successful stealth check). One party member went around the corner, failed perception to see the stealthy/concealed foe, and moved past the foe to provoke an attack of opportunity, which was made with a melee weapon. The rest of the party was out of sight of both the party member and enemy, and could not see what happened in any event. The next party member in the initiative came around the corner and moved to engage the enemy despite failing to perceive the foe through a perception check (the smoke still concealed everyone relevant).
To me, it seemed obvious that the attack of opportunity revealed the NPC to the victim, and arguably to everyone else who reasonably could have seen the attack, but everyone else who was unable to perceive what happened would still have to perceive the enemy to engage him. Two party members disagreed, relying on stealth being broken when an attack was made.
Their argument relied on a strict interpretation of the rules as written, mine on a common-sense (to me, at any rate) interpretation of the rules as intended, especially since perception is done individually. The party's interpretation goes to the absurdity that swinging a sword is no different than lighting oneself on fire as far as stealthiness goes, revealing oneself to all the world if they look even a few seconds later. My interpretation is meant to be more like the real world, enhancing subtlety and nuance, though I realize trying to introduce realism into a game with magic may be counterproductive.
So, what does the community think? Is stealth in Starfinder an all-or-nothing case, where either you have it or you don't and, if revealed, you are revealed to the entire world until circumstances permit hiding again from the entire world? Or is stealth a case-by-case consideration, and acts that break stealth only reveal the actor to those who could perceive the revealing act? I tried looking for something addressing a similar situation here or in Pathfinder, but found nothing.
I appreciate all thoughtful replies.