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Can be hidden in theory, or in practice? I know this would be a popular feature. I for one would like to hide the test post that is currently stuck in my blog history.

Not in a way, that you could hide your own post (but that would be a nice feature!), but if a post has "law issues" and Dan and Ned are required to remove it, they will simply "hide" it from the blockchain explorer > Steemit.com, so that post will still stay on the blockchain, but will be hidden from this site.