Thank you for your feedback! Yeah, the transparent walls was a last minute change because the mirror fragments behind them were totally hidden, and I didn't have time to draw shorter walls or implement a different solution. My original idea was to place a cropped version of the sprite when there is a walkable tile behind, I will probably do so in a future update.
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Ah that makes sense, I didn't think about the items being hidden. Your original idea sounds like a better solution than mine I think, I feel like that's something I've seen other isometric games do.
You could also try showing the silhouette of items behind walls. There's probably something on godotshaders for that? It's not something I've looked into before. Or maybe you could get clever with CanvasLayers.