One idea could be that Naruto hides his power to protect his loved ones from being targeted. For example, if his enemies knew his true strength, they might go after Hinata or Iruka. Another could be that he's hiding it as part of a long - term strategy to overthrow a greater evil that is secretly observing the ninja world. Maybe he wants to lull them into a false sense of security before making his big move.
It could be a new character. Maybe a powerful ninja from a far - off land who has heard rumors of Naruto's strength and is determined to draw it out and defeat him to prove his own superiority. This antagonist might be secretly spying on Naruto and trying to find ways to force him to show his true power.
One example could be a fanfic where Naruto pretends to be a weak genin even during the Chunin Exams. He might let others underestimate him while secretly observing his opponents' moves and strategies. This allows him to surprise everyone when he finally reveals his true power during a crucial battle.
Another reason could be related to his personal growth. He might be trying to master the power of the eye in private. Naruto has always been one to face challenges alone at first. By hiding his eye, he can focus on understanding and using its power without distractions or the pressure of others' expectations.
He could be using basic chakra control techniques to suppress his power. By constantly regulating the flow of his chakra, he can keep his true power hidden. For example, he might be using a form of internal chakra suppression similar to what some ninja use to hide their presence.
Perhaps he has hidden the full extent of his Sage Mode abilities. He might be able to stay in Sage Mode for a much longer time than he has shown so far, or have some other undisclosed powers within that mode, like the ability to sense enemies from much greater distances.
He could practice in secret locations where no one can see him. For example, in an abandoned cave or a hidden part of the forest. That way, no one will know about the new jutsu he's developing.
Perhaps Naruto is waiting for the right moment to reveal his skills for maximum impact. He could be planning a big surprise for his enemies or wants to make a grand entrance at a crucial time. For example, in a major battle against a powerful foe, he could suddenly unleash all his hidden skills and turn the tide of the battle, which would be more effective than showing them off gradually.
Maybe he wants to protect his loved ones. If his enemies know his true strength, they might target his friends and family to get to him. So, by hiding his skills, he can keep them out of harm's way while still being able to fight when necessary.
One consequence could be that his friends might start to suspect him. Since Naruto is usually an open book, hiding something as significant as his eye could make them wonder what he's up to.