http://massivelyop.com/2015/11/30/albion-onlines-pvp-zones-and-flagging-explained/

As Albion Online’s development has progressed, Sandbox Interactive has utilized player feedback to refine the PvP system, acknowledging that for all the hardcore PvPers in game, there are many more who aren’t into it very much for various reasons. The devs’ goal was to keep PvP an integral part of the game while still allowing new players to ease into it instead of being ganked repeatedly straight out of character creation. The result: Two initial zones have change to four (red for full loot, yellow for durability loss, green for no PvP, and one without penalties for large group PvP), and there’s now a penalty system with enough weight to entice non-hardcore players to give PvP a try.

Instead of a post-attack penalty, the game focuses on a pre-attack one; the current flagging system requires players to flag themselves “villain/criminal” before it is possible to attack, an action that takes almost a full minute and prevents the player from moving during that time. besides curbing spur-of-the moment “why not?” attacks, this method of flagging also allows devs to display how many players are flagged in any given area so that players can decide for themselves whether it is worth heading there or not. And for those just easing into the PvP scene, the durability-loss zone has a bite without being overly punishing; devs intend it to be powerful enough to make players think twice about their actions. For more details, check out the official post.