UO Second Age

Is there anyway this would be plausable is a purely combat-thief scenetio? I'd be relegated to stealing from greys or other reds, if a blue attacks me while I'm red would that flag him grey to me and i.e. able to steal from him?

Everything you say above would work mechanics-wise. You'd never be perma-gray, becuase you'd never be able to steal from blue players of jion the thieves guild.

You wouldn't be able to steal from a blue that you initiated combat with, but it they initiate it they would be fair-game