Ultimately bottom line why do you want to interact with someone that doesn’t want to interact with you in that way? What do you really get out of it? Why force it? The opt in system resolves a lot of issues with the encounter.
While I still think there should be a way to passively opt out of even being subject to the PP system, I'd be in favor of trying the cursed gems and needles being the passive way to avoid the system while keeping it in game. But in that case, cursed gems, needles, jaws, etc. should all be purchasable for relatively inexpensive amounts at an NPC shop in all towns.
For me personally even though I think the flag is good, I’ll keep the flag off and accept the consequences and not get mad when someone steals from me. I’ve seen a lot worse stuff happen in GS over the years. I said this to Midgar and he seemed to have issue with me saying that since apparently no thief would have a chance at stealing from me anyway. I guess he only likes to steal from people that have no chance or defense even though he has max PP enhancives.
The core of what I was trying to express is that every system's (and the game's as a whole) raison d'etre is to create an environment for roleplay, and the spread of skills between professions demonstrates a clear design preference toward group RP. Your single-player-Gemstone example, while not uncommon, is an edge case where the player is only interested in RP with themselves. Pickpocketing doesn't impinge on that mode of play any more than a passerby going '::sologuy or sharing a hunting area with others. Further, the revenue lost from a single monster in a hunting area being killed by another character is likely to be more than you're likely to lose in a month to pickpockets, if the reported PP rates are to be believed.