I think this works for WoW but the issue in Elite is structural, take the BGS for example: only a very few systems can be considered to be "neutral" to PMF concerns due to being locked by Fdev for whatever reason (Shinrarta for example). On the one hand the game has provided player groups a way to 'rampage' over the populated space but all the while giving them no real way to wear their allegiance in a clear manner.
Squadrons can now pledge allegiance to a MF but how would the game take that information and process it into these neat hostile/neutral/friendly laws? There are generally 7 factions per system, and multiple players can work for the benefit of different factions - I guess my point is the backdrop here is more complicated and malleable than the faction systems and spaces in WoW. EVE solves it by having a distinction between NPC and player space (iirc? Honestly been years) which was a structural choice from the get-go, any change to Elite would have to work with what's there to an extent or risk making a lot of PMFs (or more broadly playstyles) very, very unhappy.
I would probably be keener on this kind of suggestion if it integrated a system whereby moving INF at all necessitated a specific pledge, and acceptance of the potential consequences of such a pledge, but that's a pretty contentious issue in and of itself and not really the thread for it.
It also doesn't solve the issue of diegesis/immersion; that is to say even if it were meticulously implemented most people I play with would rather a better balanced ship health/damage spectrum and better C&P that existed "in lore" instead. I do generally subsribe to the idea that immersion and lore should take a back seat to gameplay and accessibility for the most part, so not a categorical no, but it's not something I'd like to see totally overlooked, personally.
Generally there are a huge number of caveats and complications with this kind of system that make it fairly unrealistic without redesigning Elite from the ground up - something Fdev probably aren't gonna do, but this is the suggestions forum so we can dream.
In isolation, ignoring other concerns, it would work better for Powerplay, and in a sense seems to have been the intention behind it, but Powerplay has its own set of problems that are really the subject for another thread. Suffice to say there'd be significant work needed there too.
It is kind of interesting to see such strong feelings about a problem that is, generally speaking, solved, lol. I do think Frontier have a tendency to drop the ball in presentation and communication from time to time though, I feel like lots of similar arguments could be avoided to some extent if they were slightly better at conveying both their intent and the options available. I do genuinely have sympathy for new players not being fully clear on the resources available to them, or the functional reality of the game's networking and systems.
