I just had the idea that would make space-sailing much more like earth's sea sailing, which would (probably) make it more fun and closer to reality.

So, in real life a ship can mask its identity by changing its flag, changing paint, jamming scanning signals, or creating some visual mock-ups to mask the ship size/shape.

Let's make that happen in Vendetta. The idea is that ships equipped with identity scanner jammer could send false/unexisting/"pirate flag" indentity to any scanner that tries to determine who the ship is being operated by.

Now, before You start yelling at me that this idea sucks, let me introduce some balancement adjustments, which will not make it too easy for pirates and not completely destroy the game itself:

1. Ships that have no identity/have unknown identity are SHOT ON SIGHT (and are automatically on KOS lists of everybody) in every part of monitored space. So in order to mask Your identity, You have to get to grey space (or an unmonitored sector) first, or You're gonna get Your ass kicked by everybody.
2. Turning the jammer on/off takes at least X=10 or 20 seconds, and the ship has to be completely still for X seconds time in order to make it work. So You are sitting duck while switching Your jammer.
3. (Not really necessary) When Your ship gets destroyed while being unindentified, You are automatically homed at random space station in grey space (as Your jammer-lie would come out if You resurrected at any faction-owned station).
4. (Not really necessary) There could be ONLY a large-slot version of identity jammer.
5. EDIT: Convoy guards in grey space automatically attack on sight any ships that are unidentified.
6. EDIT: Identity jammers are only sold in grey space, as main factions don't involve in piracy (at least officially).

Another details:
1. Unidentified ships are visible in different color on radar screen (perhaps aqua, orange or brown, i don't know).
2. When You are unindentified, and You shoot somebody in monitored space, _NO_ penalties apply. However, You have to keep Your life first, as You will be shot and pursued by everything that is nearby.

Already proposed, and I still like it.

But I don't like this implementation... too complex...

Already proposed by someone else, make an transponder addon that disguise your ship from distance as a "friendly UIT newbie in a bus", when more far than ~2km. Anyone nearer will see real ship/pilot/faction.

Or else why use it?

But I still prefer a complete overhaul / redux in IFF system...

Actually, it hasn't been proposed in this form exactly.

This is not really complex, I just made some necessary balancing adjustments. Without balancing, this would empower pirates too much, thus making the game unplayable for traders/miners.

+1 to the OP.