When attempting to set the visibility to 'Hidden' while using Notes Migrator for Exchange, the log files indicate that it was successful, but the users can still be seen in the Notes Address Book. User's person document indicates that the Hidden attribute is checked off.
The account you are using to verify that the user was successfully hidden has admin privilages. Admin privilages can see all accounts even after the 'set visibility to hidden' process has been run.
Test for visibility using a nonadmin or non-admin equivalent account.