Verb meaning "to partially hide"?

Solution 1:

Obscuring -- Obscure: indistinct to the sight... dictionary.reference.com.

Or how about misting -- this would imply the feeling of steam condensing on your faces as well.

Solution 2:

I would suggest using a figurative, 'veil' verb, unless you want a literal word.

Example from "Rise and Shine" by Anna Quindlen on Google Books

The coffee was strong, and the steam veiled our faces as we bent over it.

Veil on The Free Dictionary

v. veiled, veil·ing, veils v.tr.

1. To cover with or as if with a veil: Dense fog veiled the bridge.
2. To conceal or disguise: a smile that veiled his anger.

Solution 3:

You can use the verb cloud figuratively. In your example, steam acts like a little cloud that partially hides their faces.

to envelop or hide with or as if with a cloud [MW]

Here is an example from Annie Murray's The Orphan of Angel Street (2011):

Mercy looked over at him from where she was swirling cold water in with the hot, her sleeves rolled up and steam clouding her face.

I could even find a very similar example to yours:

I remember sharing thick slices of homemade banana bread, sitting opposite each other at the kitchen table, steam from the hot tea clouding our faces, while I interviewed her for a school project.

[fromriversedge.net]