It is fairly clear yes, but it means any pirates who are proud of their bounty, lose it. If we're happy with that... Fine...
Nah, not happy - I too would like the option to keep Wanted status and a gigantic expanding bounty
if I want it. It isn't perfect. I'm just not completely convinced by your alternative, though it's pretty good. The issues seem mainly ones about which words to use. I've been trying to think of something else and failing.
Best I could come up with was this:
1. Bounties by default never expire.
2. When you get a bounty, you get a little email thing, up in the comms tab. It's the issuing authority, and they want you to acknowledge the crime and that if you do, in 7 days you can return to the system and pay the value of your bounty as a fine (actually, perhaps this all happens in the transaction tab - you can select a bounty like a mission to bring up an 'acknowledge/not now' dialog, with more info on the bounty. Otherwise the mail thing will fill up with lots of messages).
3. If you acknowledge them, the timer on your bounty starts. You are persona non-grata in their jurisdiction until it runs out. After that, becomes a legacy fine as now. And then you can return there and pay it off.
4. If you do NOT acknowledge them and ignore the message, the bounty never goes away. You are simply wanted in their space until you acknowledge the bounty, which is when the 7 day timer starts.
You would need some info for new players on the bounty in the transaction tab - 'SELECT TO RESOLVE' - so people don't fail to realise they have to do something about the bounty to start the timer.
But it would naturally suit the attitude in-lore of how you want to deal with the situation.
If you're law-abiding or just want to stay on that faction's good side, it's up to you to say 'I'm so sorry, I had no idea, of course I'll pay compensation, I would never knowingly break the law' - in other words, deal with the red tape surrounding the crime, in addition to the financial cost.
If you're a pirate who just doesn't care, you simply ignore it, which is entirely how it should be. So they end up leaving the bounty on you forever.
This also leaves the possibility of acknowledging your crimes in a given jurisdiction later, if you want to try to escape a much worse crime somewhere else.
I dunno. I think a system like that would cause a lot of complaints though. Even with safeguards... "I didn't know I had to acknowledge my crime with the authorities to be forgiven! I would have done that 14 days ago if I'd known! Now I've lost a week's play in that system! Not fair!" etc etc