I did peek into Vvardenfell Bandits tonight and all the Bandits have a setting of 90 for their Fight stat, so that's pretty high. A Mudcrab (in comparison) has a Fight of 30 I think. Yet guards will go nuts if one of these crabs invades their town.
![viking.gif](style_emoticons/sinders/viking.gif)
I think it's because these bandits are being termed under the NPC category (in the CS). Now that I think about it, when we get attacked by that Dark Brotherhood Assassin early in the game, guards won't intervene then as well, even if we're running all around them getting chased in plain daylight.
So I think maybe in Morrowind since there's no Faction Interactions (that I can find, anyway) all NPCs are being termed in the same way. The game can't say "well bandits are in the Bandit Faction, therefore Guards will attack them because there
are no factions which work in this way. The game just sees all NPCs the same. *shrugs*