[canjobear]

In principle the output is arbitrarily natural-looking. The arithmetic coding procedure effectively turns your secret message into a stream of bits that is statistically indistinguishable from random, the same as you pull out of your PRNG in normal generation.

[vintermann]

Yes, with a few gotchas, especially related to end handling. If the government extracts the hidden bits from possibly stego-streams, and half of the ones theyv encounter give an "unexpected end of input" error, but yours never give that error, they will know that your hidden bit streams likely contain some message.

You can avoid it by using a bijective arithmetic encoder, which by definition never encounters an "unexpected end of stream error", and any bit string decodes to a different message. That's the cool way.

The boring practical way is to just encrypt your bits.

[functional_dev]

yeah, encrypting the bits before embedding seems like a valid first step... even if someone suspects steganography, they still can't read it