The issue isn't people can't handle losing things. The issue is people are taking actions specifically and intentionally to piss other people off. Then once they have started a fight, they hide behind guards so other people have to go grey to kill them. In order to deal with the person running around killing everyone's horses, you need to become a criminal yourself. It's absolute nonsense.
It's a PvP game. People shouldn't be penalized for dealing with people who have wronged them via PvP. Allowing the rep/murder system to protect griefers is the precise opposite reason of why they were put into the game.
If we continue allowing it, then my suggestion would be make the default guard number in every town 0. Delete reputation and murder entirely, and make guards purchasable by guilds that take ownership of towns, allowing them to set who the guards do and don't shoot. At least then newbs would be able to safely live in well-managed towns instead of making literally every town a griefer paradise where the ruling guilds have to go grey and get attacked by their own guards to keep newbs safe in their own city.
So yeah, you getting 2 murder counts is way better than that. Though easily solved by just making it so there is cap on how much rep you can lose for actions against a single player within a specified time. 1 murder count or rep loss every 5-10 minutes negates your issue.