Face blindness makes you have a hard time telling people apart. Prosopagnosia is what it's called. Regular humans have a specific centre of the brain devoted to memorising the tiny differences between people's faces, like nose shape, freckles, etcetera. Those with prosopagnosia lack that function, and cannot tell people apart any better than you can tell two different pieces of wrinkled paper apart. Possible, but very strenuous and requiring concentration and context.
Being unable to even be aware of a human person standing next to you is quite absurd in comparison. It means you would get a literal blind spot in part of your vision, without even noticing there being a blind spot. Imagine if someone was standing very still in a clothes store; could you see them assuming they were a mannequin, with them promptly leaving your field of vision as soon as they turned around? If someone covered your eyes with their hands, could you see through them? Would you not notice that you had gone entirely blind? Do your furniture steadily turn invisible when your dead skin cells and hairs build up on them?
It's therefore not going to help to try to compare this to an actual disorder. This is a magic spell, plain and simple. And one with a lot of fuzzy edges. Besides what I already mentioned, what about shadows we cast? What about video recording, or printed photographs? What about video recording in infrared? Printed X-ray pictures? CAT-scans?
What about sensors that do not rely on a human watching them, but are programmed to warn the operator when a human enters the field of vision? Are they disabled, or are the warnings invisible too? They might be audible as well.
So, this is a profoundly broad concept. It has been done before; in one of the latter Sword of Truth books (great novels as long as you ignore the occasional political lean), someone gets cursed with a spell that makes people forget her as soon as they see her. She can effectively sneak anywhere, and people would notice her for a millisecond, but forget it before they can raise alarm. Opening doors and leaving behind footprints is what gave her away in the end.
The Hitchhiker's Guide to the Galaxy has a variant where a specific pseudo-scientific instrument makes people see something, acknowledge its existence, but decide not to give a damn.
How would this impact society? Depends on your rules. You say that audio is not affected; people would, I imagine, start wearing little speakers, emitting their personal ringtone constantly, whenever they are on the move. They might wear big inflated belts in crowded areas, so as to do no harm when they inevitably bump into people. In more secluded locations, speech and breathing should give away someone's rough presence.
Society would not collapse. Breaking into valuable places is not easier; folks would just buy more locks. Only attacks and murders on the street would be easier, but wary victims would also have an easier time hiding.
The only thing that could possibly collapse is the fashion and make-up industry, depending on whether recorded imagery is affected.
The rest depends on what rules you set for this magic spell. But please, do not compare it to prosopagnosia. That's like calling broomstick aviation an extension of housekeeping.