> As a more practical problem, I have also seen suggestions that it's possible to turn on the camera, take a photo, and turn it back off again too quick for the LED to be noticable, and if you do that several times per second you could capture low-frame-rate video without the green light, so even a hardware solution might not be perfectly secure.

It's trivial to add a capacitor or hardware timer to illuminate indication light for some time after the camera loses power.