even though it's still abusable, i actually commend them on the job they've done trying to balance it. it's probably the most complex stealing system i saw in an RPG. for instance, i was trying to rob a guy on a non-sneakable town square (it looks like it's always fully red regardless of who's watching it), so i teleported him away, but that makes him take damage and run away, calling for help, so i had another guy immediately start a conversation with him, and yet another one keeping the guard engaged. maybe he wouldn't have minded teleporting if the damage had been blocked by armor, but he didn't have any, and fortify makes the target teleport-immune (i wonder if that was one of the reasons for that). also, maybe a smoke cloud could have helped sneaking, but i didn't have the means to create any, apart from setting things on fire and then dowsing it, but that would have caused damage as well.
