I also miss this feature. The reason I liked the hide/show option was because as I'm re-arranging the graph, sometimes I move an entity far away, and want to split and show the caption. But then if I move it back, I don't want to have to dream up a new caption, I'd rather just hide it again.
Another reason it's nice is because you provide a default caption, which is often adequate, but it's more steps to select and delete it, rather than just hide it.
The feature is most important when brainstorming a new model when things are changing frequently.