That in itself is a giant laugh. Especially since reputation loss is connected to committing crimes rather than actually killing people.
So if you go to an anarchy base and just kill everyone there in cold blood, you don't lose any significant rep.
If you go to a res site in an anarchy system and blow up every miner that isn't worth robbing to prompt a new one to spawn, the factions that own those mining ships don't care.
A lot of the problems with the C&P system as far as PvE balance are concerned would be solved by focusing less on the all-seeing-eye-of-the-law and more on dealing with reputation loss, IMO.
From a realism point of view - if you kill someone at a base and nobody saw you do it, but the faction that owns the base knows that you were docked at the time of the killing, that's... circumstantial evidence at best. Maybe very strong circumstantial evidence, but it's not strong enough for a conviction. But they're pretty damn sure you did it. So even if they can't legally issue a bounty against you, they'll certainly remember for the future.
On the flip side of the coin, anarchy factions aren't going to take well to bounty hunters, so killing their ships is going to annoy them regardless of whether it was legal or not.
Perhaps more importantly - being hostile with a faction is a way bigger deal than being wanted.
Personally I'd love to see much more of the rep bar count as "hostile" (or let certain actions take you below -100%) and things like... res site pirates instantly aggroing just like authority ships if they belong to a faction you're hostile with. It'd be a lot harder to just raid the same bases over and over (or farm the same res site over and over) if you upset the locals enough that they go weapons hot on sight.
