I just don't get this debuff at all. I mean, civilian ships are common enough to be sold everywhere. If it's so common, why would it arouse MORE suspicion?
From a reasonable perspective it also makes no sense: a smuggler, spy, or other clandestine persons disguise themselves as civilians to stay hidden. Why does a peashooting paper-dingy arouse more suspicion than an armor-clad bristling-with-gunboat?
From a gameplay perspective, it means you can't use these ships because it's a giant "HERE I AM, COME KILL ME WHILE I'M TOO WEAK AND VULNERABLE TO USE ANYTHING BETTER.". Civilian ships WANT to get by unnoticed because they're being targeted by pirates.