I have no problems with trying to fix the "Vets abusing Newbs" problem that plagues VO. (and dismissing such requests as 'carebear' only shows you don't really care that this game has insufficient numbers, nor does it demonstrate intelligence as there's nothing backing it up) However an issue I think would need addressing as well (since this suggestion requires it to work flawlessly) is the definition of 'friendly'. I can think of multiple reasons 2 players would be unfriendly to one another, but have similar faction reputation with the same faction. How is this problem solved?

Factions should be concerned with their own interest first and foremost (control of their territories, trade lanes, and defense of allies), before concerning themselves with the affairs of others. If two players hate each other, this should not be of particular interest to the faction. At this point, a faction could exclude both players from protection. However, factions in this game do not really have a concept of neutrality or complete disinterest. They either like you are they don't. Given this state, the next logic choice is for a faction to insist on non aggression by all parties entering it's authority. As far as the faction is concerned, the players will just have to behave themselves while in faction space. As a general rule, if a person can not behave themselves in regard to another person while in someone else's domain, they are the more likely to be a repeat problem, and they are the logical choice for exclusion from domain protection, from the perspective or the domain authority. Thus a faction should side against the aggressor.

In summary, the problems between two players in of no concern to the faction, and the two players will have to behave while in faction space, or the faction will have to take action, with the default target of action being the aggressor.