Banner Tow aircraft pilot reported while on location observed another aircraft just feet from their aircraft; resulting in the other aircraft taking evasive action to avoid a collision.

Narrative

I was conducting a banner tow operation for a mission located at the nearby port. I departed ZZZ1 with the banner and heading southeast bound to join the waterway to then go south. I had contacted ZZZ approach to ask for a possible bravo clearance for the 1;000 ft. shelf that is partially over the port. Initial contact was a few minutes before I was on site; located around the city. I had requested a clearance over the port at or below 1300; the controller then gave me a squawk code with no further instructions. Just as I was approaching the mission site; she reached out again apologizing for the wait and asked what I was requesting. She then referred me to tower instead. To not enter the airspace; I descended down to 800 ft. remaining only over the water while still being able to display my banner to the target. I contacted tower and after a brief confusion about my location from the controllers end; I was informed that I could not be issued a bravo clearance and to instead remain outside the bravo airspace. I complied and asked if I could squawk VFR; receiving the affirmative I squawked VFR and switched to the frequently used Air to Air frequency for that area; which is also charted on VFR charts as a recommendation in that area. Shortly after switching; I communicated to a colleague on the frequency that I was at the port and that ZZZ was unable to issue me a clearance. I was remaining at my altitude of 800 ft. circling north around the port then around the islands to maintain clearance while displaying my banner to the target. On my second pass going northbound; I noticed a Cessna 172 in a 45 degree right bank just mere feet from my aircraft at the exact same altitude. The aircraft was close enough that I could have read the facial expressions of the pilot had I looked towards the cockpit. I had not heard this aircraft on frequency previously; and attempted to contact them on the advisory frequency to no avail. I then watched this aircraft on ADS-B and remained in visual contact; where I saw it complete a left 180 turn going back southbound in my direction over the waterway. I noticed their ADS-B report 3;500 ft. and then stop reporting. They were still at my same altitude of 800ft at that time; contrary to ADS-B. The aircraft then later passed over the port; away from my aircraft; and headed east then north continuing along the shoreline. I reported this aircraft's position and the near miss to my colleague and other aircraft in the area so they could look out for them and prevent another near collision. After reviewing ADS-B data; it is my belief it may have been intentionally turned off after the near collision. The aircraft's ADS-B stopped reporting approximately 1 minute 30 seconds after the event; and was working fine and accurately prior to it turning off; including at the time of the event seemingly reporting altitude correctly; albeit maybe 100 ft. off. Some research on Aircraft Y revealed it is equipped with a GTN750 which should have given the pilot ample information about other aircraft; especially ones that are in close proximity. Reviewing online ADS-B providers shows my aircraft continually reporting ADS-B; meaning there shouldn't be any question of my aircraft showing up on the instruments of the other aircraft; absent an internal equipment failure of that aircraft. After this event; I continued to conduct my mission in the vicinity of the port remaining vigilant of other aircraft. Other fixed wing and rotor wing traffic transited in my vicinity; announcing positions on the advisory frequency and remaining a safe distance. This is unfortunately all to common with the south beach area; but this is the closest I have experienced so far.