It's called Shroud of Undeath. While it adds a lifetap proc, the older spell Shroud of Death also does the same thing. Lifetap value, mana cost, and duration are all identical meaning a typical Shadow Knight gains only the skeleton form from the new spell.

Danth

Newbie question -

Does Shroud of Undeath outright replace Shroud of Death within the game, or are there two spells available now?

Both versions exist. Also, iirc skeleton illusion form does or at least should decrease the player character's vision to be at or near what it is for humans.