Yes, removed games are not really removed, just hidden. And for the reader here, we are not talking about hiding in the client. If you go to support page of game at help.steampowered.com/en/wizard/HelpWithGame and click “I want to permanently remove this game from my account”, then its like you wouldn’t own the game anymore.
Not many know you can go to same page and restore the license. It’s noted that you get the same license of game than before, not a new license. I don’t know why Steam has the permanent removal, if its not permanent at all. But now you know; you can restore. And that is what the user in this post is talking about.