Maybe just to clarify: That hotel was a higher category hotel in South Asia with video surveillance in all hallways and a housekeeping person stationed on every floor.

I agree I don't like the idea of indicating from the outside of the room if you are in it or not but I guess they used it to time the housekeeping.

In this case, I didn't really mind since I have my personal SOP of keeping all my valuables either securely locked away in a safe or with me - my toothbrush and clothing is not that interesting and the little travel photo frame with my loved ones is only valuable to me...