There is 3 PvP states a player can be in shown with name colours. Neutral which appears as a light orange top left of your screen and white to other players. Player killers are Red names, this means that they killed at least 2 neutral players. Blue names are for aggressive players meaning that they shot at another non-red player or they shot in a safe zone within 60 seconds.
Shooting in a safe zone, even by accident will turn you blue for 60 seconds. This means you can now be killed and NPC guards will kill you. Lowering your weapon or putting it away will help prevent accidentally doing this.
When you die, anything you have equipped can not be lost and there’s some items which you can not lose even in your inventory. The rest have a chance of being lost when you die. Look at the probabilities in the item info, but in general guns, magazines, and clothes are safe. Food, drink, ammo and medical consumables have a low chance. Other loot in general have a high probability. So when you get something good, safe guard it as a Stockman straight away, like the Station Stockman in Lubech Station.
A Red player name indicates dangerous, each neutral player killed adds 100 to Karma or PK Status, however killing Mutants can reduce this, with tougher mutants reducing more. So a Player Killer will usually not be Red, but if they are Red they are confirmed Player Killer.
So, Neutral players are not an indication they are friendly, so keep a note of who you have seen Blue or Red as I would count them as dangerous. Also look for aggressive signs, like pointing their gun raised at you or others and them being suspiciously close when you are looting. Pressing escape or F will abort you current action.
Killing a Blue or Red player will not increase your Karma. If you shoot a Red, you keep Neutral status, however if you shoot at a blue, you will turn Blue also which means you can not retreat to a safe zone and NPC Guards will shoot you. aswell as being open for being killed by other players for no Karma. Remember that they will respawn and will likely try kill you.
How to reduce your Karma or PK Status
If you have increased your Karma or PK Status by killing Neutral players, it will how on your Character under PvP Stats. You can reduce this by killing Mutants, in Lubech your best options are Silvans in Central Park, Dogs and Boars.