I have a brand new perspective on reputation decay for major factions. It's probably similar to my past stance, but here's how I feel about it now.
Right now, I've worked around the various parts of the Empire to become Allied with some notable minor factions. Thanks to bug sorting from the Devs, I became a Knight, having been a Squire through performing missions and not getting promotions since then. However, a side effect of this is that through doing lots of small missions and becoming Allied with scattered assorted minor factions, I am now formally Allied with the whole Empire.
And it doesn't feel right. Being universally Allied, that is, not being a Knight. Being a Knight is cool. Very cool.
For one thing, now I do not know my precise reputation stance with every Empire-aligned minor faction in the game: with them, right now I am just "Allied." There will be only two situations when I will know for sure what my exact position on the rep spectrum is for a given Empire-affiliated minor faction: when I complete a mission involving that faction and see the reputation change breakdown; and oncemajor faction rep decay kicks in (which it probably will do once I get back to doing Federal military missions or going on another grand exploration journey). At those points, only then I will know which minor factions remain Allied and which ones are merely Friendly or just Neutral at the end of the day, without the blanket whitewashing of the global status. However, they take some time to do, and some effort. I don't want to wait.
In that respect, I have a suggestion.
Allow major reputation to decay as per the current plan, but make clear the distinction between being genuinely Allied to a minor faction, and being allied as per global, major faction stance towards you. Perhaps it would be better if the global rep standings be relabelled to Trusted instead of Allied, and Recognised instead of Friendly, and perhaps Indifferent instead of Neutral. Being Allied to a minor faction overrides all global labels, being Friendly to a minor faction overrides the global Recognised and Indifferent labels only (but Trusted overrides this if one is globally Trusted), and so on. Similar for the negative rep labels, which can be Untrusted instead of Unfriendly, and Enemy instead of Hostile.
This way, there is emphasis of the permanence of minor faction reputation over time, while still acknowledging the global effects of major faction reputation and recognising that this can change according to one's recent activity with that major faction.