This issue was clarified and given a new description - the old one is below.

A grade item that is hidden could have been hidden because of the activity settings, or because it was manually hidden in the gradebook.

We could change the valid states for a grade_item to "Hidden/Visible/Based on activity settings" to make this clearer.

Old description:
There appears to have been a change that breaks MDL-31487.

1. create an assignment
2. Assignment is visible and gradebook item is visible
3. go into the grade book and set the grade item as hidden or hidden until
4. Assignment is visible and gradebook items is hidden
5. hide the assignment
6. assignment and gradebook are both hidden
7. unhide the assignment
8. assignment and gradebook are both visible, the hidden / hidden until setting having been lost.

Tested this on our 2.6 version but also found on the demo.moodle.net version so this affects the latest version too.