No, it does not loopback, you can go in the info screen of your soldier to check the stealth value. It works pretty much as I described also against the ancient guards, I have done this mission with one single Infiltrator/Assault (but with the old double damage SA, so now it is probably not longer possible).
I have done a more detailed post about that mission in my campaign play through thread (with many hints and tips about stealth gaming): Report of my veteran (own experience and also difficulty) playing style - #23 by MadSkunky
There is also a report of my final mission in this campaign with 5 full stealth operatives, but of course plenty of spoilers, so be aware 