I could see a hefty fine being appropriate if caught transporting a wanted person or even being attacked with a chance to flee and escape but insta death is obviously a bug.
I mean why have it be an option of transporting people wanted or otherwise if it just means you will die instantly the next time you dock. Makes no logical sense...at least to me.
I second this, I too lost 9m on my First Passenger Mission from insta-death, What happed in my case is I left the mission station got scanned and Everything was fine no crime detected, Great

Did the Adventure and Returned back to the mission Station Got scanned "Passenger was Wanted" Got insta-Deathed in 4 seconds.... He Became wanted, He left not wanted and returned wanted if thats not a bug Please explain how?. I'd love too See Fines Rather than kill contracts. on a final point, I think there should be both Non-Wanted passengers and potential Wanted missions with the potential missions have a Higher Reward because the risks are higher like Smuggling missions,