Even if i'm undetected and make a successful roll for pickpocket the NPC somehow still knows I stole from them a few seconds later. Is it supposed to work like that or am I missing something?
I've noticed you can cheese it by promptly fast travel away after a successful pickpocket and just wait them out. But that doesnt feel right either.
You don't really need to "fast travel", just to move a bit away from the victim with the character who acted as the thief.
