Which is correct?
A) The ship was lost sight of in the dense fog.
B) The ship was lost track of in the dense fog.
Both are correct. A) The ship was lost sight of in the dense fog. You are just using your eyes.
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Both are correct.
A) The ship was lost sight of in the dense fog. You are just using your eyes. You may just be looking casually at the ship.
B) The ship was lost track of in the dense fog. You may also be using eg radar.
'lose track' here suggests that you have some responsibility to monitor the ship's movements. eg maybe you are a member of th Coast Guard.