Terrorists are people who are not afraid to take innocent lives to forward their cause, either through the following genesis of panic, terror, or destabilisation of infrastructure, etc etc. They work for an idealogical goal.
Pirates are people who are not afraid to commit crimes to benefit themselves. This may incidentally include killing, and usually involves some form of monetary theft, be it of cargo or credits. Taking lives, however, is usually a last resort for pirates and it is not what they have in mind. They work for themselves.
It is impossible to be a good Terrorist with a Pirate ID, as you can not kill transports and freighters - traders - who are the most "innocent" lives on Discovery, basically civilians - part of the civilian workforce and infrastructure, anyway. Transports are seldom attached to military - or non-civilian - factions.
It's impossible to effectively be a terrorist with the Pirate ID, because you can only ask for cargo and kill on occasion. Pirates are interested in omitting crimes for gain of wealth, Terrorists do it for primarily more idealogical reasons, ones they are not afraid to kill for.
With the Terrorist ID, you can indeed kill these people, as being a "terrorist" would demand. Killing to push your cause is all that matters.
With the Pirate ID, you can't at all, as being a "pirate" would demand. Loot before killing.
