Distracting Shadows

[The Total Package]

"You have learned to remain hidden by using larger folk as a distraction to avoid drawing attention to yourself. You can use creatures that are at least one size larger than you (usually Medium or larger) as cover for the Hide and Sneak actions, though you still can't use such creatures as cover for other uses, such as the Take Cover action."

Would this work if I was in plain sight of an enemy but next to my ally? Or would it only work if I was directly behind my ally?

[Finoan]

I would use the normal cover rules as far as drawing lines to determine if a creature has cover against another creature.

What this overrides is the standard rule saying that the lesser cover from a creature can't be used to hide in. You do still have to actually have the lesser cover though.

[The Total Package]

Just one other question, with Ceaseless Shadows would that mean I could hide in plain site without cover from allies?

"You excel at going unnoticed, especially among a crowd. You no longer need to have cover or be concealed to Hide or Sneak. If you would have lesser cover from a creature, you gain standard cover instead and can Take Cover; if you would have standard cover from a creature, you gain greater cover instead."

[Finoan]

*checks into feat*

Looks like yes.

"You no longer need to have cover or be concealed to Hide or Sneak."

That is a complete and independent sentence. There appear to be no restrictions on it.

The narrative description mentions something about crowds, but the rules mechanics don't require the existence of a crowd.