In reality, it's essentially nonfunctional. Cover tracks erases your tracks for the room you use it in, but you still make fresh tracks once you leave it. Furthermore, once you have left the room, you may no re-enter and alter your tracks.
In Game Description
Ranger skill: Cover tracks allows one to hide his/her trail through the outdoors. By using woodlands skills, this will allow one to attempt to reduce the visibility of their tracks, and those of others in the same area. When combined with the skill of Ranger Sneak, a trained woodsman can pass almost unnoticed through an area