I think the point is that you can get infinite protection when allies "attack" you without the intention of causing harm BUT with just the intention of reseting your "peace timer". You can then run infinite distances while being invulnurable and sell goods you looted without anyone being able to stop you from doing so. Clearly abooze.
Soooo, you lose 24 hours for 1 hour of "peace time"? That sounds really bad to me.
Yup, once again UIF using glitches in the system to cheat with "ally" attacks allowing peace time extensions.
One trick is to move ahead of them slightly and just keep track of time so that you are between them and a fief when peace time ends (was 1 hr. on someone I attacked the other day before we could attack him again). It was originally a good idea and still is as long as chadz would ban people from strategus who glitch abuse it, which destroys a useful tool and makes it a cheat.
When have anyone done this? In the OP it was Black Tea (neutral merchant clan, IIRC, that have lots of different Mercing agreements) who attacked Sir Ironlake of UDNWSFLC (neutral player gathering). After Black Tea won, they tried to run away, but got jumped by Wataga (Random Bandit clan with no faction agreements).
I've yet to see anyone do this on purpose and it really seems like a very bad plan to me. Losing 100 (even if they are unarmed) troops once a day (also think of the logistics to always have a new army nearby), to get stopped for 24h, only to get 1 hour of measly "peace time"?
The Peace Time is one of the few things that gives neutrals, small timers and bandits a chance to get away with anything in strat. There's really no need to remove it.
Remove it and force big armies to have smaller armies around it for escorts to prevent wasteful sabotoge/ambush attacks.
Big armies already got protection from sabotage/ambushes by the "one third of the defenders troops needed" rule. I agree that there should be some more incentives for big armies to have smaller armies flanking them (logistical nightmare now, btw), but the 1 hour peacetime isn't one thing the big armies are taking advantage of, nor will remove it make big armies need smaller armies around them.