Most of this discussion boils down to differences in headcanon. The only person that can say for sure exactly how the stealth works In-Universe is who makes the lore, which I assume to be Alex. This is the equivalent of two kids playing make-believe and claiming that one person's imaginary ability doesn't work, but their own imaginary ability does, when really it doesn't matter and they should both be trying to have fun instead of arguing about who's right. And again, if there's no set-in-stone canon on a certain topic, you're always free to believe your own without oppressing the headcanon of someone else.
This. Plus, this entire discussion deviated heavily from the original topic of small patrols behaving abnormally when faced with inactive transponder, and instead wandered off into considerations on whether or not stealth in space/orbit is plausible.
Bottom line - patrols are acting suicidal when you're running with transponder off and this behavior should not happen. It's absurd, stupid and unfun.
Even though the last post for this thread is over 2 years old and at the risk of reviving a topic that has been since dealt with by either the prior update or the since posted .95 patch notes, this thread still raises a few good points for consideration (and also some less good ones in the middle). Admittedly, I arrived at this thread while trying to better understand how transponder detection code interplays with regular ai behavior, so the intended 0.95 addition of story points might either mitigate or eliminate the reason I got here. In any case, I will attempt to respond in a listed fashion:
1. It is nonsensical that small patrols confront much larger, potentially hostile fleets running without its transponder (at least for player, personally unclear how ai vs ai works for pirates/smugglers). From a purely rep loss perspective, a player who maybe forgot to turn on their transponder might be better off smashing the patrol rather than deal with potential rep loss, although I guess this is possibly mitigated by the fact that apparently you still lose some rep even if you win/part of the patrol gets away and isn't run down/eliminated. If the player is going full pirate, it won't matter for you, but to the ai, should definitely matter (I am unclear how the ai does loss cost/benefit analysis comparison when deciding to fight, sometimes stuff runs away when you a badass and sometimes it doesn't). This is worse if you have already turned on the transponder and the patrol still rolls up, but that situation is covered by point 2 (also why I got here). The mildly realistic solution would be not only should the tiny patrol peel off and shadow or escape the badass fleet sans transponder (for which I know such behavior is available for ai), but also should also attempt to summon/activate whatever available nearby larger fleets exist to instead of confronting said badass unknown fleet. Such an ability to call for allied help should prolly have a delayed activation if the help isn't within "range" (like interdiction or sensor sweep) in order to give the large and potentially hostile fleet time to either attack/silence the small patrol or emergency burn away to escape the incoming larger fleet. Plus the addition of this ability would have significant extra play potential for any player colonies (being attacked by pirates) since those have been added since the date of the OP.
2. The primary reason I got here is because it's sometimes difficult to determine sensor range changes by turning abilities on or off, so sometimes when I don't feel like wandering way off to an asteroid belt to turn my transponder on, I instead turn it on out in normal space and suddenly find out I have shifted into sensor range for some ai patrol (typically the tiny ass pickets). This is admittedly a risk in "normal" space (especially since game can't/won't display differing sensor ranges, shouldn't necessarily have to find a mod for this), but in any case the picket still yells at me to turn the transponder on (even if the picket was offscreen and I was at the edge of the sensor range) and I get rep loss without the normal opportunity of curing it (ie, by smashing said picket like mentioned in point 1). This situation also currently allows for no "morally relative" means of curing it (bribery), but the future addition of story points actually makes for a much more possibly ideal solution to this situation. Besides tying in the possibility of offering either "an excuse" or an actual bribe as an initial possible dialog option (which already exists, since Luddic Church has been known to ask for "tithes"), if this initial option (after some behind the scenes calculation) is rejected by the ai patrol, the player could either choose to waste a story point to basically force the acceptance of the initial excuse and/or bribe (first excuse calculation, then bribe calculation, but not the other way) or instead decide to take the rep hit. Of course, if ai accepts the "excuse" (charisma without a charisma stat) or the bribe, this would preclude the need for using a story point, at least until the next time. Some of these suggestions/points may have already been covered by the story points blog post, can't remember.
3. Regarding a lot of the middle discussion of this thread, some will have to accept that the planetary interaction dialog is basically a necessary abstraction, but this does also raise some other interesting possibilities (though this may test the limits of the game's fleet behavior ai). It is a good point that both when a player is on a planet or ends up in a "lose/respawn" scenario, little to no time passes in the game, and can lead to some odd results (such as your broken down out of supplies fleet being chased by a hostile fleet to a friendly planet, so you can repair and and resupply AND THEN slug it out). The suggestion of adding some short passage of time (or automatic time acceleration, or a delay prior to landing like when activating transverse jump) that is proportional to the number of planetary dialog actions taken seems a reasonable suggestion when landing on planets, although such an addition may cause certain issues with how the real-time economic data/intel is handled (although would also give player an incentive to accept trade offer solicitations while on planet instead of trying to gain a few days for tight deadlines).
When the player ends up in the "lose/respawn" scenario, some proportional period of time definitely should have passed (and maybe some proportional monetary loss, unclear whether this already exists), and other posts have also alluded to this issue (
http://fractalsoftworks.com/forum/index.php?topic=11654.0). However, since players now might have colonies (and/or friendlier factions), the player should now also be offered the option of either spending less time/money to just get back to the closest non-pirate civilization, or more to get back to the player's nearest colony or maybe a friendly faction (unless the player is friendly with pirates and that location is closest, basically inverted first option). The passage of time and monetary loss would ideally be proportional to the distance between the player's losing combat location and intended destination, but this might lead to a situation where it costs so much to get somewhere that more time would need to pass, etc. etc.; perhaps a flat loss might instead be used.
4. The flip side of abstracting planetary interactions (besides time issue in point 3) is whether the player's entire fleet in fact "lands," or shuttles go back and forth to orbit with cargo (since player always takes a shuttle, I guess no ship really "lands"). Since the game does not yet seem to have the option of fleets splitting in space so the player could leave half if his/her badass pirate fleet parked hidden in an asteroid belt and instead only fly some less obvious freighters closer to the planet (which would be cool, although with ai limitations for the "parked" half of the fleet. It might be possible to mitigate the player's loss of control of the split off fleet by giving the option of choosing some delineated choice for ai behavior while player is gone, since such ai behavior already exists). The alternative would be to give ships above a certain size (or fleets containing such larger ships) the option of a shuttle radius, so that the large ship/fleet with large ships still hangs in the nearby asteroid belt/nebula/magnetic storm and can still trade/use planet (and possibly have a greater time passage depending on distance, tying in point 3). Whether the shuttle type could be swappable in the refit/ordinance screen is also a possible option (ie, whether a shuttle type could be chosen, mostly affecting shuttle range vs cargo capacity, also maybe black market detection instead of the current change of flat non-detection when transponder isn't active). This assumes that having/using small ships would preclude the need for using such shuttles.
This is all food for thought, but bear in mind that this game is already pretty close to its 1.0 release, so not all changes are possible (or instead might wait for a 1.1 release). Also, if any of this has already been addressed in the interim, please point this out (hyperlinks would also be nice). Can't search bar for everything!