I thought about how player pick pocketing in general would be a heavily grief-strewn endeavor. Then I asked myself, would player vs. player pickpocketing work if you could only steal already stolen items from each other?
As for countering being pick pocketed, have a synergy pop up that will prevent the item from being pick pocketed and give a bounty. Additional thoughts would be it could break/prevent stealth for 10 seconds and make the target immune for 10 seconds as well. This would coincide with synergy cool down and prevent people attempting to lift items while synergy use is on cool down. Successful pickpockets make the target immune for say, a 30 seconds to 1 minute to avoid having this as a reasonable way to "steal transfer".
For people not wanting to participate, if you don't have stolen items, then you will show up as empty and cannot be pick pocketed. If you do get pick pocketed, then the items lost are not of any real use.
Due to a typo in the system, the area was accosted by the Daedric Prince Moar Lag Brawls.