Look out on Final

[IO540]

When flying such a military circuit in a low wing aircraft, wouldn't the wing obscure any traffic on a straight in approach?

Not unless you were really banking. If one flies a constant turn off the normal downwind leg, the rate of turn is well below rate 1. Maybe 5-10 degrees of bank, at 90-100kt.

If OTOH one was flying it from a tight-in downwind leg legitimately, for example doing a circle to land following an instrument approach to the opposite runway, then yes the bank angle will be a lot greater, but then you cannot be doing that with any traffic in the circuit because you are going to get an unpredictable conflict when you turn final. Hopefully, if the weather is bad enough for such a procedure, the circuit will be empty anyway, but this does make it difficult to practice circling approaches at the published minima. If there is anybody in the circuit you more or less have to break off "downwind" at the circuit height, and waste a lot of the practice value of flying a tight circling approach.

If one was flying a constant bank turn to final from a tight downwind leg just to look clever, then yes I agree with you (the bank angle could be 20-30 degrees) but I don't see why somebody should be doing that. It might look "military" or whatever but isn't right at a GA airfield.