Keen Eye doesn't decrease the encounter rate of the Pokémon by 50%, it gives you a 50% chance of evading it if you would have encountered it.
When a random encounter occurs (or would occur), the game selects the wild Pokémon before it selects its level. Keen Eye/Intimidate is checked last (at least in Emerald). If that Pokémon’s level is 5 or more less than yours, there’s a 50% chance of the encounter being canceled.
Say you have a 50% chance at a Golbat that only appears at level 30, and a 50% chance at a Solrock that only appears at level 35. And your Pokémon is level 35.
50% of the time, that Golbat is going to be selected, and then 50% of the time, it is going to be avoided.
So the actual influence of your ability is that your encounter rate is being reduced by 25%.
You now have a 33% chance of encountering the Golbat, rather than the 25% chance you initially thought. This is because your ability is not directly influencing the Pokémon’s base encounter rate, but rather your whole encounter rate, a quarter of the time.
Does that make sense?

A Pokémon set to appear at levels 2-3 could appear 'less' at level 2 and 'more' at level 3 (if your Pokémon is level 7). But it’s honestly unreliable. Especially because of how the tables in these encounters work.
Sometimes Pokémon are set to appear at levels 3-5. Sometimes they are set to appear at level 3 and level 5. Sometimes they are set to appear at completely different rates (50% for level 3, 20% for level 5).
In your head, there’s only two Pokémon in this area. In actuality?

There’s five Pokémon in the table, some just happen to share a species with each other.
You can raise the encounter chance of level 40 Pokémon above, but you’re also lessening the chance of a random encounter to begin with. I genuinely could not even find a practical use case for this in any game.
The practical use of this ability outside of battle is to simply decrease the number of wild Pokémon you encounter. I don’t think it has any practical use in Shiny hunting whatsoever. This would only work if it affected the encounter rates of the Pokémon first, not last. But Pokémon games aren't programmed to randomly pick a level, they are programmed to pick a Pokémon with a specific range of levels.
Think I covered everything.
Sources: Emerald Encounters, Encounter Calculator