Here's an alternate theory: the Predator was seeing in color-vision.
There are advantages and disadvantages to both Predator and human vision, and City Hunter was certainly prepared for something trying to sneak up on him by cloaking itself from thermal vision, so it's very likely that Jungle Hunter would be as well. Also, Predators are fond of leveling the playing field between their prey, much in the same way as a torpedo-carrying submarine "levels" the playing field against an old wooden warship by surfacing several kilometers away, of course; Jungle Hunter would be able to see what we see, and pick up details that would be lost on his thermal vision. (By the time he was fighting against Dutch, his wrist-computer had been damaged, whereas City Hunter's was intact when he used it to change vision modes in Predator 2.)
An invisible person couldn't see unless their retinas were opaque, as any light would just pass through them; similarly, the Predator's giving light sources something to refract off on his visor, seeing in the color spectrum for a second or two before transitioning back to his thermal vision.
I like the theories about the zooming and taunting, though.
