I've been 'pirating' inside the houses, but going after targets that by their own actions fall outside defensibility by local militaries and police -- this means unaffiliated pirates, lawful traders hauling illegal/embargoed goods, and outright smugglers. Mercs are frequently on the menu too, but generally all I can ask for is their nuclear mines. BH tagged ships would be if they weren't all in battlecruisers or part of a faction I absolutely do NOT want to antagonize (RP and OORP). I also leave tagged allies and in-RP useful allies alone.
I've been shooting for a 'Boondock Saints' approach to piracy, and so far it's been getting amusing (mixed) results. RM snickers quietly over it, while ignorant Liberty independents trumpet blanket generalizations about taxing. Earlier I was in a competition with a RM officer chasing down a Slaver -- he wanted to shoot him, I wanted to extort him. (The guy kept F1ing out, neither of us won.)
Now, as I generally leave legal traffic alone (unless someone wanders too far from where he ought to be) and routinely shake down other illegals and shady characters for profit and/or deterrence, what side of the law would most consider my 'Junker Policy Enforcement Agent' character to be on?