I think you are correct. There is no "Improved masking" that i am aware of.
There is "Extended Masking" which allows you hide quickened, anchored and sustained spells on top of your aura and foci.
(Follows the Masking rules)
As to your thought experiment;
physical: you can't see auras on the physical, so this is mute
spell only resistance... and if they don't beat the spell, they don't see nuttin!
Dual-natured: If they don't beat the spell, they don't see your physical form. HOWEVER, they still see your astral form! As to what your astral form looks like to them, that depends on if they beat your masking - but that doesn't really matter does it? Because they
know something is up! (People
don't just wander around invisible while mundane!)
Astral: The spell doesn't matter as they never see your physical form, so it comes down to your masking. IF your masking holds then you appear as you wish (mundane, weaker awakened, etc) with a little BG smudging (your masked spells).... But he still "sees' you. (this is why stealth skills are important to a mage).