After reading the description of this technique, I was surprised of how useful this technique can be, despite it's rank. The fact that you can basically change the way the terrain where a battle is taking place is very intriguing, I must say, Sensei-kun.
Now this technique can be great, of course depending on where the battle is taking place, wether it's on a water source or on a rocky terrain. Now lets say, you and I are currently fighting on a water source, I can take advantage of the fact that this technique doesn't require any hand seals, which in my opinion is a plus and I'm going to use an example, bare with me please;
You are currently standing mid-range from me, I could gather some raw chakra and send onto you, whilst at the same time, I crouch and place my hand (s) on the water source, thus making it seem as if I were using a water technique, when in reality, all I did was send my raw chakra into you, to make you believe that there are walls of water surrounding you. Now, if these were to work, Sensei-kun, your character would believe that he has been trapped, thus blocking his vision of my character whilst I could still see you. This would greatly work in my favour, not to say, that it also limits you to certain techniques. And that is just one example, the same can be done on a rocky terrain or one with sand, etc.
Now, moving on. I will talk now about how to counter this technique. Let me start by saying that I believe that before one starts a fight, they should first study their surroundings. This can help you later on in fights and against techniques like this one, were the opponent, manipulates his surroundings, changing them. Now, lets say I am fighting someone in a plain field or a grassy field, really doesn't matter and suddenly the terrain has changes and there's now large pillars or a hole on the ground, this just an example, and my opponent didn't really do anything but just stand there, I would think how did he get that done when no hand seals were performed? or when he never made contact with the ground by placing his hands on it? that's when I come to the conclusion that my opponent has placed me under a illusion.
These little things are the things that can determine weather your illusion works or not. You have think and perform your techniques with great detail. A great thing about this technique is, what I already said above, it doesn't require any hand seals, so if you can do the little things, to make it more believable then this technique can be hands down, really useful. In my honest opinion, there isn't really good disadvantages to point out, the disadvantage would be the user, if he fails to give enough detail.
I really like this technique, I would put it in the same category as the D-rank earth release technique and the D-rank water one, were despite being D-ranks, all three techniques can be really helpful.