I don't think that is healthy for the snake, I hope is fine

Oh it's almost certainly not good for it, especially since the moss climbing up towards the eyes where it would obscure vision and the added water drag may slow down strikes on prey, but if the snake is otherwise healthy, the moss will likely be removed with the snake's next shed. However, it IS a fascinating wild phenomenon captured on film.

I wonder if the fact that it now looks almost nothing at all like a snake would make up for the slowed strikes. Like, if it took me about a minute to decide that that's a snake, a fish might get awfully close before reaching that conclusion

It's possible, although fish don't avoid predators only by sight, they use their lateral lines to detect movement. I would guess it would have more luck against something like frogs or lizards, but it's also possible the movement of the moss itself might confuse a fish's senses. Unfortunately the moss also makes it impossible to tell body condition to tell if the snake has been successful at hunting or not previously. It would be a fascinating case study, to see what it is doing in the wild, and whether or not it's working well.

Also since @howlsmovingnutsack asked (even though they didn't ask me), it is believed by local experts to be a puff-faced water snake! As far as I have been able to find out, the family collected it to bring to researchers, and has been feeding it while it awaits pickup.