Against small arms, concealment can still provide some protection, but it's mostly along the lines of your body not being where they think it is, and that effect where bullets start tumbling chaotically after going through (more relevant if there's significant distance between the thing they went through and the target). So modifiers to hit model that fairly well, with actual cover providing armour values.
The Chinese paper armour wasn't paper thin, though:
"
Paper armour
During the wars between the
Later Zhou and
Southern Tang, civilians on the Tang side formed "White Armor Armies", named after the white paper armour they wore. These Tang civilian armies experienced some success in driving off small contingents of Zhou forces but avoided confrontation with the larger army. The White Armour militia army was later revived to fight against the
Song dynasty, but they were ineffective and disbanded.
Later Ming texts provide descriptions of paper armour. One version was made of silk paper and functioned as a gambeson, worn under other armour or by itself. Silk paper could also be used for arm guards. Another version used thicker, more flexible paper, hammered soft, and fastened with studs. It's said that this type of paper armour performed better when soaked with water.
Paper armour was still worn by the
Hui people in
Yunnan in the late 19th century. Bark paper armour in layers of thirty to sixty sheets in addition to silk and cotton was considered to be fairly good protection against musket balls and bayonets, which got stuck in the layers of paper, but not breech loading rifles at close quarters." (Wikipedia)
A couple of points there: Mostly silk or cotton fibre in use, not wood fibre aside from the bark version. Dozens of layers. Not used by professional soldiers.
Claims of it being as strong as steel seem to be quite overstated. Certainly the actual soldiers used metal armour and not paper.