So if I break into a house cloaked, npc seem to spot me by saying something but I dont get any bounty. It doesnt make sense, or am I missing something here?
For some reason being invisible doesn't actually stop NPCs from seeing you... I have used cloak and invisibility potions and both have had NPCs comment and tell me to get out, but also no bounty.
Then there was a weird house in Balmora that I wasn't invisible at all because there was no one in the room. But then I got a bounty from some lady in some adjacent room because she saw me... through a wall... She didn't see me go past a doorway or anything like that. Like I had to navigate down a hallway and then through the doorway to even find her and she was staring directly into the wall, looking towards the direction of the entrance, screaming at me to get out... So yeah, their NPC sneak detection could use some work.
It's a bug that I've read is as old as the crime system. I've reported it multiple times, because it makes crimes *without* shadowy disguise actually impossible. I think it's one of the bugs Zenimax has decided they won't fix.
RE spart's post below mine: This bug is all over Vvardenfell, and you certainly get a bounty for it there.
The Justice system was added after the introduction of the base game. This is why it's absurdly easy to get caught sneaking around in base game locations but also there's no penalty for it either (probably why it's been so low priority). Thieves Guild Content and later doesn't really have this issue