muffle is noise (armour, how fast your moving)
sneak is visual (enemy LOS, lighting)
these 2 together affect whether enemy will know your there. You can only get damage multiplier by crouching though.
An oppoennt that is blind or with back turned to you will not know your coming if your 100% muffled. If your not in anyones LOS it doesnt matter what the lighting is
Knocking items to the ground, dogs, companions can give away that your there no matter how good your sneak/muffle is.
Muffle boots = 50% muffle so to be completely silent you need another 50% from spells, potions or perks.