The previous pictures didn't demonstrate the monster cloaking very well, so here are some more.
Here's a normal mancubus in the back and a cloaked one in the front:

And the revenant:

Each monster has it's own custom cloak skin, which uses the normal map to generate the effect.
Some monsters are (deliberately) not entirely effective at cloaking, as things like glowing eyes or fire are still visible.
For example, here's a cloaked cacodemon:

I'm also looking to add an effect to cloaked monsters that, when shot, makes the cloak glitch temporarily in some way.