I think the NPCs did that in KCD1 if you were dirty, had high charisma but a fancy armor or similar. It feels like it works similarly in KCD2, since their demeanor changes significantly when switching from peasant clothes to a proper armor. Don’t have knights armor or any other fancy outfits yet though, so I can’t tell for KCD2.
No. But the arrow tip points towards the center. Weapon sway makes it nigh impossible to aim on the controller. I can’t relate to KCD1 since I played that on PC.
Yes, you don’t want to fight against more than one enemy, the game even has a tutorial with a stylistic drawing of you lining up the enemies in a line, so that only one can engage you at any time. I managed to pull this off with two enemies, with three you would need to tank some hits.
To be honest, it’s still a little hectic for me, but I feel the most notable change is that you can avoid being countered / masterstriked. By positioning your weapon, you can block, perfect block (allows you to strike back) or masterstrike which remains unblockable. There is now an interesting back and forth between blocking, striking back and being blocked, which can go on forever - until someone has no stamina left or someone pulls off a masterstrike.