LSB encoding using a PRNG order is a common way to do steganography, but it’s usually pretty easy to detect. Statistically, an image with LSB encoding will look different than one without it if you’re looking at the distribution of bits across the image.

The goal of the steganography isn’t to replace encryption though. For example, if Alice and Bob are criminals and Alice gets busted, it would definitely look suspicious if someone saw Alice sent Bob a bunch of encrypted messages. They might not be able to figure out what the messages contained, but they don’t need to know in order to start investigating Bob anyway.

Instead though, what if Alice just posted a picture to social media. Nothing about it looks weird, it’s just a regular social media post. Maybe the steganography is detectable if you’re already looking, but it isn’t weird enough to get someone to start looking at it on its own. But…Bob knows there’s a message encoded in that image and how to extract it. So Alice still gets caught eventually for some other reason, but there’s nothing actually connecting her to Bob. She didn’t send anything directly to him, it’s just an image that’s out there where anyone can see it. But Bob still got the message, and was the only one who did. Maybe the police go back now and analyze Alice’s pictures and see exactly which ones had a message encoded onto them, but they still can’t tell what the message was or who it was for.

That’s usually what you’d do. Typically steganography isn’t your only form of security. You’d encrypt it first, then encode it. And even if you can detect that there is a hidden message encoded in some file, that doesn’t mean you actually know how to extract it even if it’s not encrypted.

The steganography is really just there to try and avoid having people know you have something worth encrypting so that they aren’t trying to figure out what it is in the first place.

Well, allegedly whatever type of steganography the article about doesn’t, but they don’t go into detail so I have my doubts.

The extent of my experience with steganography was a grad course a few years back with a professor who was a big name in the field. So I’m not an expert or anything, but I am somewhat familiar with this. And in my experience the answer is no. It’s an arms race. Someone comes up with a way to hide data, someone else comes up with a way to find it, so someone else comes up with a new way to hide it, so someone comes up with a new way to find it, etc. That’s not to say it’s perfectly accurate and that you can always tell with 100% certainty if a file has data encoded in it, but every method I’ve seen creates some artifact that is generally detectable with with a high degree of accuracy using the right kind of statistical analysis.