Here's the deal. Yes, if you're IFF-less, and you have no other 'flags' that would indicate you're anything other than a freelancer - pirate ship, contraband, past history, etc - he has to treat you as a freelancer. Treating you as a pirate would infer that you're walking around with a big sign that says "I'm a bad guy, please shoot me". Which you wouldn't be, unless you were some kind of giant moron.
The part that I don't agree with is that it doesn't work the other way.. you apparently can't use a LACK of ID - which is basically what a generic ID is - as a basis to attack/bounty someone who is using your faction's technology without permission. This aspect seems to conflict directly with the faction rule that allows OFs to bounty or engage ships using faction tech without the ID.
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