100% this.
For the habitual criminal, who understands the way C&P works in the game, punishment is no obstacle, merely a consequence of action. No C&P system short of simply removing crime and criminal gameplay (either in actuality or virtually) will ever change that. Meanwhile, for the lawful player, who doesn't understand the system, the C&P system can be an absolute embuggerance.
I wrote this a long time ago, and I think it still applies. The core reason the C&P system doesn't work is that primarily rewards those who know how to avoid it's consequences, and punishes those who don't. That might
sound reasonable, but in execution, it means someone who goes "I'm going to plan a day of crime" goes about doing their thing, racks up a bunch of fines and bounties, and clears it out at the end of the day, without having batted an eyelid about the consequence. Meanwhile, a casual miner who inadvertently shoots a cop will find themselves lugging about a half-load of diamonds or something, unable to continue mining, at risk of being destroyed by cops and criminals alike.
This is why I've always argued that criminal conduct aspects such as notoriety and being wanted need some
major incentives attached to them. The reason for this is so that the consequence of minor crimes can be substantially reduced, so that a simple "Shot a cop" by accident can be very easily cleared without things like IF. Meanwhile, for a career criminal, clearing your name of things like bounties and notoriety needs to be
detrimental to your career as a criminal, by closing off your access to those incentives.
What this does is create an environment where players pursuing a lawful career and inadvertently cross the law can minimise their exposure to the consequences of criminal behaviour, in order to continue pursuing the rewards of a lawful career. Meanwhile, players who seek the best rewards a criminal career can offer must expose themselves for as long as possible to the consequence of their actions.
Of course, then there's smuggling, where the whole goal of that is to not get caught... arguably that's a hybrid career in between, and the consequence of that is being caught with illegal goods and forfeiting the goods, or at least any profit margins.
tl;dr being notorious and wanted should allow access to the most lucrative criminal activities, while simultaneously carrying the biggest consequences. Conversely, being clean should be the death of most criminal activity for that player.