Quick thoughts on some more obvious issues:
- what happens if a bounty hunter (who isn't automatically going to meet any of those conditions) wants to attack a pirate? More generally what happens if someone with the flag off shoots at someone with the flag on?
- what happens if someone who doesn't meet those conditions wings up with a PvPer and just heals them while being completely immune to return fire?
- what if rather than winging up they just fly a T-9 into the instance and let the PvPer use them as a big shield?
- how much fun are people going to have making their flag "off" and then using their invincible ship to boost-ram other players into stations, planet surfaces, etc.?
I suspect whatever you do you'll either end up with weird and exploitable loopholes (which the attacker will know and most defenders won't) ... or it'll be immensely complex about exactly what happens when (which the attacker will know and most defenders won't) ... Certainly no-one previously trying to come up with useful "Open PvE" rules or computer-readable "legitimate PvP" definitions has managed to even come close - but that shouldn't stop you trying.
- If the pirate is not wanted he can't.
- if one person in wing has flag raised, all do.
- haha, good one. That might work for about half a minute.

- This is an issue, but not an insurmountable one.
I don't support this idea very much myself, but there are few technical arguments against it as other games implement it well enough. And as for 'it would be too complicated', all I have to sy to this, is 'lol, have you seen what we currently call CnP?'
Anyway, yeh, nobody said it was perfect. When someone made a certain spaceship game, I'm sure they said, 'but won't players kill each other for no reason cos they're butts?', didn't stop it being a good idea.
