It’s not privacy glass even though it works as one. Insulated glass that is standard in all modern windows is made up of two panels of glass separated by a filler piece.
The seal between the filler and the glass develops a small hole allowing air into the space between the glass panes. The moist air begins a slight shading the glass, followed by visible moisture. The moisture slowly morphs into a whitish film on the glass which blocks visibility. It cannot be wiped off because it’s between the glass.
The glass can be removed from the sash and a replacement installed. It’s a failed window glass seal.
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