The Auto Hide Cursor plugin enhances focus and readability in Obsidian by automatically hiding the cursor after scrolling or after a set delay. The cursor reappears immediately when the mouse is moved, offering a cleaner and distraction-free workspace. It is particularly useful when paired with focus-oriented plugins, providing a more immersive writing or reading experience. Users can customize the timing and behavior of the cursor hiding feature through the plugin's settings, tailoring it to their preferences.