Really interesting conversation, thanks for raising this one. I'll throw in my two cents.
I can't see a version of Open where PvP can be toggled off, even if there are many who would like to play that way. IMO, it would go against the spirit of Elite and certainly against the idea of "Dangerous". It's also not easily explained through in-game lore.
However, I do sympathise with those who would like to encounter and interact with other players during their sessions without getting killed. Obviously there are private groups for that, but it's understandably not quite same since you could only meet people you already know.
Overall, I think the solution to this would be better coming from adjustments to the crime and punishment system to make sure there are meaningful risks/deterrents in place for non-consensual PvP encounters rather than from a binary PvP on/off toggle.
If you do take another pass at C&P I have few suggestions for what they are worth.
1) Get rid of or rework notoriety so that it acts a a negative reputation modifier resulting in exponential reputation loss. (not influence, just your reputation)
2) Keep Hostile Faction interactions the same, shoot on sight. No docking at faction assets.
3) Starting at unfriendly and increasing frequency at hostile add NPC faction enforcers spawning randomly like NPC Bounty Hunters or PP Adjusters do now. If you are a known enemy of a faction they should want to even the score. Sided against the terrorist in the last war? They want Payback. Made a fortune stacking pirate massacre mission? Don't be surprised that they took up a collection to send an assassin your way.
4) Give NPCs teethe. We have NPC spawn tables that consider combat rank/ship flown. They need to add engineering level spawn to tables. EDO shows in the shipyard the number of engineered modules my ship has. Maybe don't spawn a vanilla NPC against a ship with a dozen engineered modules.
5) Throw the rules out. When Hostile with a faction the kid gloves should come off. The NPC spawn tables should not be restricted by Combat Rank or ship flown at that point.
6) Other consequences; starting at unfriendly I would like to see some minor consequences to remind you that you are supposedly part of a living galaxy. Give me the occasional passive aggressive flight controller that puts my dock request at the bottom of the queue with a snarky comment about bad behavior. Or when I'm planet side spawn some non-hostile scavengers to spray paint/vandalize my ship. I can shoot them and be a criminal setting in motion everything above again or just suck it up and fly my ship with "CMDR Zannry Sux. Scav life Rulz!" until I can get to a friendly port and repair my paint.
Honestly, I can say that C&P is broken. I've been RPing a freedom fighter bouncing around between the ED Union systems for the last week. Players that engage in comms and are not active collaborators go free. Those that try to run, open fire or actively confess to supporting EG union I run off or destroy.
The million credit bounty is meaningless, the notoriety 7 (decayed from 10 while doing the last CG) equally meaningless. I'm even still allied reputation wise with EG Union from work I don't even remember doing at some point in the past. System security is a minor nuisance at best as I try to fly and type. They pose little to no danger to me even in my Viper III.
Honestly, I think they are a liability to players who embolden by the 5:1 odds in there favor decide to open fire in a ship not fit for open. ATR have some teethe but don't really have the desired affect. A soft touch like me can't stick around bantering endless with a player with them shooting at me. A true griefer isn't going to open comms. ATR pushes role players out and incentivize the shoot first and hit hard types to kill and dash. When a systems security forces intervention results in more danger for the players they are supposed to protect that's a problem.
The one time I was at all mildly annoyed/Inconvenienced was at the CG. I played both sides and ended hostile with one. I couldn't turn in the mission to collect the rewards. Being denied docking even with silent running was the only time I felt like my actions had any real meaning.