When worn, it makes the player blend in better with Trees, Bushes, and the landscape. Essentially, the Forest Camo is a less sneaky Ghillie Suit.
Because of its color, this clothing is more useful than others, with the exception of the rare Ghillie Suit. This means that players can easily hide in things such as Trees and Bushes (unless you have high level armor, which stands out against light colored objects), avoiding detection by other players. This is especially useful when using a Sniper, as you can be hidden far away from your target while avoiding enemies nearby as well.