I've seen neutral ships travelling darkened out before but never have I known one to turn it's lights on before. But then again, I've never fired on a vessel until I'm absolutely sure of it's nationality.....
Also, I use the Flags_Enlighten mod that I edited to make the flags a bit darker than the mod but lighter than the stock game so I don't have to get too close to identify. The stock flags are too dark IMO and when you add GWX's darker nights into the equation, it can be murder (literally..lol).
Or you can edit the renown values and sink her anyway, teach those Irish a lesson.