Considering these disadvantages what is the best situation to use it
instead of regular Invisibility Watch?
I personnaly use it when the ennemy team is concentrated in one point with lots of engineers and when you just can't go in there non-cloaked without dying, even with a disguise.
In Capture the Flag for example, if the other team is camping their flag and defending their base a lot, it's a good choice.
You'll probably have to stop several times halfway to replenish invisibility before reaching your goal but once you're in the ennemy base, behind their defense lines, with the Cloak and Dagger, then you can start having fun.
Protip : if people are starting to chase and look for you, just get invisible and climb on the top of a box or any other prop in the map. People NEVER look up to spycheck. Just stay here as long as you need while invisible and get back to the business when they start forgetting you !
I usually play the CoD with Your eternal recompense, it's a great combo to destroy a base from the inside.