Alignment has many pros and cons. Take Pathfinder Kingmaker (Video game for PC) they lock your dialog choices by your alignment. That can be incredibly frustrating as a player, but the reason for it is to aim to keep you in character. As players we're very detached from our character and alignments are a way to help bridge that detachment. To help us better understand who our PC is. A lawful evil guy may pay a fine for jay walking and then kill the whole town. However it would be out of character (typically) for him to go around helping people and having them cry on his shoulder.
As much as I do love alignment and find myself to be a fairly neutral good alignment. I think reputation allows for greater freedom and allowing the turmoil that exists within the PC's heart in the players head. Because our motivations are often very complex. I'm playing Thane right now and my Thane is a very caring and kind person. However, this is simply so that he can better use people and avoid betrayal. Internally, as he admitted to Amadia, he does not care for the lesser races at all. Just as an example of how one can appear to contradict their alignment.
Therefor even though he's a neutral and possibly neutral evil character his "reputation" with people is that of Chaotic Good and the world ought to react to his chaotic good reputation rather than his neutral/neutral evil alignment.
