Only just fallen foul on this. Hacked a terminal to see what it does. Got a CR300 fine. Later had to pay CR8,000 to install a module in a clean exploration-engineered Sidewinder. Still later was annihilated in said Sidewinder by cops, whilst coming in to land at a spaceport, for a CR24,880 rebuy. Suggestions:
Crime could be more similar to original Acornsoft Elite i.e. degrees of heat: Clean→Offender→Fugitive. Offender status is earned by less serious offences e.g. traffic violations, hacking of installations, smuggling, firing weapons in a restricted area; whilst Fugitive status is earned by repeated minor violations or else by more serious offences such as piracy and murder. Fugitives have WANTED status everywhere and are only safe from the authorities in Anarchy systems.
Then authorities could only open fire without warning on players with Fugitive status, so that you can't be killed simply for making a mess of parking or hacking a terminal. Offenders are challenged and told to stop immediately. If they don't they're fired upon. After being scanned they're told to surrender control of their ship, and then are escorted to the nearest starport and a red-lit landing pad which they automatically dock at. Any time the player touches the controls to break automatic escorted hyperspace/supercruise/docking they're fired upon. Upon landing their ship is impounded, and only released once fines are paid. If the Offender can't afford the fines, they lose all their cash and their ship, and get a starting Sidewinder with CR1,000, or whatever starting options were available to them as a Backer. They retain other stored ships and modules.
Also, losing a ship by any means should mean losing all engineered upgrades to modules. Insurance can replace the modules, but not their unique modifications. It should also mean the loss of all on-board materials, but that would be disastrous, so spaceport materials storage facilities could be made available to mitigate the loss. This would make players more chary of losing their ships, and keep the Engineers busy re-engineering the modules of those players that do lose their ships.