Using the image stabilization should NOT be considered cheating in scopes with split-prism stadimeter (Like the one simulated in OLC's GUI) and should be considered cheating in mods that do not simulate split prism periscopes like for example my Optics mod.
When you have a split prism stadimeter in your periscope -which was used already in the 20s by Zeiss f.e. and only later incorporated by the US submarines, despite the stadimeter being an american invention by Lt. Fiske- the image still moves, but because it moves exactly the same in both split images, you don't notice it and can anyway measure the angle subtended with high accurancy.
Does this clarify the matter for you?