... That's funny, because, statistics-wise, the Bounty Hunters are only slightly friendly with the Police of every House except Kusari, who don't give a f*** about Bounty Hunters. (not slightly disliked- Slighty liked. Yes. The Police are Neutral, leaning towards Friendly, with the BHG)
I don't see them shooting eachother much, if at all.
Stuff you learn in-game reveals that the Police and Militaries are actually not that averse to having help dealing with threats to law and order. There was even one Navy pilot who said he used to be a Bounty Hunter, but, after saving Navy pilot butt again and again, he ended up joining them because they need better pilots.
I'd kinda compare this more to Old West law enforcement, where crime was rampant and Bounty Hunters were an essential part of 'keeping the peace'. Why do you think Liberty has that hoof-clopping music while flying in open space?
And there's still Bounty Hunters today, as well. And they still do good business. It's just there's less of them nowadays. It's like private investigators.
On the matter of killing Xenos... LPI guys say it themselves that it's better to just kill them instead of try to keep them locked up. I'm serious. They think it's safer to kill them and get it over with than to lock them up and possibly have their buddies bust them out again in no time.
EDIT: The ONLY way a fight between two un-hostile groups (EVEN ALLIES/FRIENDLIES) is if a Player intervened that was only friendly with one of them, thus prompting the friendly one to try and shoot up the one that isn't friendly. I've seen it happen. A corporate Transport shot at a JUMP GATE that shot at me. A JUMP GATE! For ME! They liked me enough to piss off the authorities.
EDIT2: It was something like a Bowex or something heading through the Magellan -> Manchester gate. I was like, 'wtf'.
EDIT3: "The so-called 'authorities' are more corrupt than we are!"
Currently: Remastering Kiith Somtaaw's Acolyte Fighter. These Homeworld ships need some Sirius work done on them. ^.-
"Do not interfere! We're here to protect the President! Schultzky's a traitor!"
For peace throughout the colonies! We will never forget..
"He who controls the [insert orange powder drug here] controls the universe!"