Yes, tieflings will typically just be segregated and be forced into the poorer parts of a town or city, unless we are talking about particularly cosmopolitan areas like Waterdeep.
"Kill on sight" is an attitude that a tiefling *might* run into in a particularly rural area that has never seen one. Even then, a couple of village hicks are probably gonna be too afraid of the "devil" to attack it.
I feek Tieflings are much more likely to get murdered in cities than in the countryside. Tieflings are rare. There's not enough of them to ghettify them into their own neighbourhoods -- city folks should be just as likely to never have seen one as rural folks are. And there are a lot more people in cities and mob mentality is much, much stronger.
The PHB itself talks about how tieflings "subsist in small minorities found mostly in human cities or towns, often in the roughest quarters of those places". When I used the word "segregated", I did not mean to imply that they had their own districts all to themselves, but that they would be pushed to those ghettified places as a result of racial prejudice against them.
While I can see the argument that a tiefling is more likely to get murdered in the city (because an armed and organized gang is more likely to do so than a bunch of farmers), I don't think that is because city people are "as likely" to have never seen one. Tieflings are "rare" only in the sense that they will always form a very small minority where they can be found, but they're not unicorns.
Now, you might personally feel that they should be more rare, just as Eldath thinks they should be more evil, but I do not see where WotC's own official material supports that.
