I am also not quite sure why you think an on/off option won't make you happy. If it's set to off it's literally exactly the same like what we have right now, ie no confirmation whatsoever.
If it's set to ON then it will annoy me with popups (unless ALT is down ofcrs), if it's set to OFF then it wont solve my problems of accidental stealing. I thought I made that clear. To be clear I don't think your solution is terrible, I just think the problems of accidental stealing is better solved by just allowing you to pick up "owned items" when in sneak mode. Feels more natural imo and you avoid popups altogether.
As for entering sneak while under friendly sight cone, that might be a problem because people can then steal anything from a friendly NPC with impunity by simply entering sneak whenever where ever. In your case, it's easier to just break formation with your rogue and have him entering stealth somewhere else. Unless the seeker happens to be following your rogue of course.
If they can see you then they will catch you stealing anyway. Friendlies should not care that you sneak or it will just create annoying situations, at least they shouldn't care when you are in wilderness territory. If you are inside their house then of course they should care
