Thanks for clearing up.
There is AFAIK no difference in the game between Norwegian ships on the Norwegian coast and those carrying goods for the Allies. In the real world, Norwegian ships travelling domestic routes would of course not be sunk without a proper reason. There were German officers aboard most vessels, and all vessels that were supposed to trade with occupied countries.
ALL Norwegian vessels in Norway were painted in Norwegian colours and had their names largened*, to avoid attacks. The results were so-and-so. The most important note is that Norwegian vessels in Norway were mostly in small convoys, sometimes guarded. The Allies knew about this.
THAT would be why I am confused.
*

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