Snoopy: They could also see what you're doing wif they had you on their Enemies List. The Friends and Enemies lists work the same way in this respect.

Besides, there is a bug in the system which causes the following: if you have someone on your Enemies list, you cannot see what they're doing when you're in a game with such person, while they can see what you are doing. In simpler words, it's the opposite from the way it should be.