I want to be able to walk into enemy territory and walk around unnoticed (without my name being flagged hostile ... usually with yellow or red text) ... and then if I'm *discovered* ... then have the fun begin ... that would be epic. I love the idea of ordinary citizens going about their business and the player being able to blend in when necessary (or spy).

It's an artificial pvp flag ... you could play it safe and rarely have those experiences or you could play it more aggressive ... either way, your play style comes with certain risks and benefits.