The one thing your're missing is 'speed of information'.
These day's, it's easy for the news to go worldwide on a murder or manhunt.
In a world like BG3? Or most 'dark ages'-type worlds? It can only travel as fast as a man on a good horse. Or a spell to talk to someone far away.
But in a wild, dangerous world, what man is going to risk his life to ride from town to town saying 'These people are evil'? And what mage will spend his spell slots to tell someone half a world away? Plus they woudl have to KNOW that person to Send a magic message.
So it makes more sense that only people who live near or wittness a murder would get upset. Sending that information to other towns would probably garner 'Eh. They can deal with it themselves' reactions.
Thus, the whole world would not hate you just because of a few evil acts; most would not ever know what you did!
Indeed. Localized reputation, with negatives/positives only bleeding out into the wider world if it goes above a certain level.
Naturally, no negatives/positives if there are no witnesses.
Kill someone in a village (no witnesses) - nothing
Kill a lot in a village (no witnesses) - suspicion
Kill someone in a village (witnesses) - became a wanted criminal in the village
Kill a lot in a village (witnesses) - became a wanted criminal in the area
The more you kill, the more you are caught, the greater your infamy and the greater the CHANCE you might be recognized.
Thus, finally a use for masks/costumes and deception/acting skills.
