Setting ARPSYSTEMCOMPONENT property to 1 does make the application program to be hidden in the Add/remove programs.
The ARPSYSTEMCOMPONENT property in Windows Installer does not actually do anything directly to your installation. The Add/Remove Programs (ARP) applet always queries the Windows Installer for application and patch information to display on the Control Panel Window. When ARPSYSTEMCOMPONENT is not defined for a package, all the data is read from the registry key under HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion\Uninstall.
When the property is set to 1, these entries are not written in the registry and hence, do not appear in the Control Panel Add/remove applet.
Also, setting ARPNOREMOVE property to 1 will just disable the remove button from Add/remove Programs.
Check the link below for more information on other MSI Properties