You can hide whether the list of people who you are following shows up on your profile. You can't, AFAIK, hide the fact that you are following someone from the person themselves.

In other words, if you have person B in your circles, you can hide whether person C (or the general public) can find out that person B is in your circles. You can't prevent person B from knowing that they are in your circles (thought they won't know which circles they are in).

I'm pretty sure this is the model. I can confirm it if you'd like.