What does the sneak crosshair state mean?

So far I've noticed three different states for the sneak crosshair:

1. A flat line:

   —•—

2. The familiar eye:

   <o>

3. And the eye with DETECTED below it.

Obviously #3 means you've been spotted. What's the distinction between numbers 1 and 2?

Solution 1:

Internally, Skyrim uses Stealth Points to keep track of detection events. The player has a certain amount of Stealth Points at any given time, with a maximum of 100 and a minimum of 0.

• When no enemy is able to detect you, the flat line is displayed

• When an enemy could detect you, but hasn't yet, your Stealth Points begin decreasing. This is indicated by the eye opening. The more the eye opens, the closer your Stealth Points are to 0.

• If you have less than 100 but more than 0 Stealth Points and something happens which makes the enemy no longer able to detect you, your Stealth Points begin regenerating back toward 100. The eye starts closing.

• Any time your Stealth Points reach 0, you are Detected by anyone who is able to detect you at that time.

An important note is that enemies who are unable to detect you (for example, because you are around a corner) will not automatically realize you're there simply because your Stealth Points are 0, it only means that you have no grace period - the instant they can detect you, they will.

Also, you will not get stealth bonuses against anyone who has detected you. You will get stealth bonuses against anyone who has not detected you, even if you are detected by a third party at the time.

Source: Bethsoft Creation Kit

Solution 2:

Flat line - Nobody knows you are there and nobody cares. Equivalent of HIDDEN in Fallout 3. You will get sneak bonuses.

Familiar eye - Someone is looking for you. Equivalent of CAUTION in Fallout 3. You also get sneak bonuses.

Detected eye - Someone can see you. Equivalent of DETECTED/DANGER in Fallout 3. You will not get sneak bonuses.