You are on to something here.
Add to that a way to reduce the Icon footprint say starting at 1k so by the time you are in shooting distance you can choose to see only a red dot, small red country avatar, or nothing. Part of the time at 400 with the icon below the target you only see the target in your gunsight. By 200 the icon disappears into the base of your gunsight below the reflector glass unless you are looking up from below or attacking from higher back and up.
A caution to this. Chances are only accomplished vets would use it by choice. If you are the only participant in a furball with it turned on. You may disadvantage yourself into loosing sight of your targets more often than those choosing to stay with the default Icon. We do ACM against the giant red Avatar relying on it at all times for tracking and orientation. You may even find yourself flying enough disadvantaged that less talented players who normally cannot catch you can now with increased success.
It's a great individualist's choice wish for the accomplished ACM practitioner. But, this may be something more in line for a global paradigm evolution of the game to improve immersion.
