What really bothered me in Both Morrowind and Oblivion was that if someone did not like you reputation wise despite them being a ordinary townsfolk and you some high level demon slayer decked out in expensive armor they'd give you a rube angry response no matter how low of a peon they were. Regardless of being evil or good the fact that your are someone important and they're not and you could give them a beating or worse without ease it seems reasonable that there should be some type of intimidation factor when dealing with NPCs. I mean in medieval days some peasant might hate a lord or king but not dare speak out against them to their face. I think this should be even more so if you are an evil character with a violent reputation, some NPCs should be visibly shaken and scared while speaking to you.
I also think guards even if you have killed someone in public right in front of them if you are way higher level and they can t ell they are outmatched they should give some hesitation before moving in on you or go get some back up before confronting you.