I am playing the same set up as you are and for me they only state that a Warship or a merchant has been spotted but not friend or foe.I normally only see allied vessels when i am near ports though so I am guessing that the just has the sailors know that in a friendly area they are seeing a friendly vessel.And i would still think that seeing a vessel through the bincos they'd at least be able to determine most times it was either a warship or merchant and being in enemy controlled they lean on the save side and assume even from long range that is not a friend.None was saying that you where being conceding.
I think there was a way to to turn of the "sighted" menu by marking one of the check boxes that turns it off completely.Of course the downside is that with it off advancing time to high levels is a bad idea as you wont get a slowing down of time when a vessel or more importantly a plane is spotted or when you get a radar contact even you only then see it in the message box which those get missed easily at higher time compression. Personally I do not mark any of the "do this every time boxes" but I am pretty sure that you can turn that entire waring off now that think of it.
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