Impact of Target and Tool Visualization on Depth Perception and Usability in Optical See-Through AR

Optical see-through augmented reality (OST-AR) systems like Microsoft HoloLens 2 hold promise for arm's distance guidance (e.g., surgery), but depth perception of the hologram and occlusion of real instruments remain challenging. We present an evaluation of how visualizing the target object with different transparencies and visualizing a tracked tool (virtual proxy vs. real tool vs. no tool tracking) affects depth perception and system usability. Ten participants performed two experiments on HoloLens 2. In Experiment 1, we compared high-transparency vs. low-transparency target rendering in a depth matching task at arm's length. In Experiment 2, participants performed a simulated surgical pinpoint task on a frontal bone target under six visualization conditions ($2 \times 3$: two target transparencies and three tool visualization modes: virtual tool hologram, real tool, or no tool tracking). We collected data on depth matching error, target localization error, system usability, task workload, and qualitative feedback. Results show that a more opaque target yields significantly lower depth estimation error than a highly transparent target at arm's distance. Moreover, showing the real tool (occluding the virtual target) led to the highest accuracy and usability with the lowest workload, while not tracking the tool yielded the worst performance and user ratings. However, making the target highly transparent, while allowing the real tool to remain visible, slightly impaired depth cues and did not improve usability. Our findings underscore that correct occlusion cues, rendering virtual content opaque and occluding it with real tools in real time, are critical for depth perception and precision in OST-AR. Designers of arm-distance AR systems should prioritize robust tool tracking and occlusion handling; if unavailable, cautiously use transparency to balance depth perception and tool visibility.