Like turhram said, in MO1 when you looked into somones inventory (snoop) they would get a chat message telling them that you were snooping. Then if you took anything they would get a message that you stole. At that point you became hidden gray to them. If they pushed or hit you (pushing was safer in town) you would go grey and guards could be called on you.
snooping was totally legal, so you could go around and look into everyones inventory. But the moment you took something you had to run for your life.
it was actually a good system that kept everyone on their toes. However, you couldnt steal anything over a certain weight, so everyone would just carry large sums of silver (instead of a few gold coins) and it was too heavy to steal. Deeds, horse receipts, pots, and other light stuff was all fair game.i know someone that stole a keep deed
once.