Never seen this in vanilla Skyrim.

I just came out of Riverwood Trader (level 25). I have not taken sides in the Civil War. Three Storm Cloak Soldiers show up and we get a major brawl invlolving Alvor and his wife, along with the guards, attacking the Storm Cloaks.

On the first go round I didn't really grok what was going on right away. I thought it must be a vampire attack. By the time I could do something, Alvor's wife was already dead. On the second go round, I tried to intervene by attacking the Stormcloaks, but the guards and Alvor (and his wife) started attacking me. I thought maybe I had accidentally hit a guard. So I loaded it a third time. This time it was clear that my attacking the Stormcloaks in order to save the citizenry turned me into a criminal. So apparently I was not allowed to save anyone even though I was in a good position to do so. Instead, I just have to stand there and watch as the Stormcloaks murder the town Smith.

BTW, I wonder how Hod and Gerdur would have reacted?

You have to be an Imperial to attack stormcloaks without repercussions

Not so - the problem is Skyrim's faction and crime system was poorly done. The game has tagged me with bounties for attacking the enemy while the Civil War was in full swing, and since patch 1.6, I've even experienced my own side going hostile on me for attacking the enemy.

seems like bethesda is dedicated into killing off all npc life in skyrim, are they trying to turn this into fallout 4 or something?

Well, I just got the answer on Gerdur: she's dead. I ended reloading, watching what I thought were all the Stormcloaks killed (2) and left Riverwood for Whiterun. Now a courier has run up to me with a letter of inheritence from Gerdur. I am assuming the third Stormcloak killed her. (Stormcloaks, like Thalmor, and apparently vampires, always seem to travel in threes.) I thought there might have been a third stormcloak around, but I didn't see him. And the idea that he killed Gerdur is just weird.

You could try some of the calm, pacify or harmony spells or maybe even a dismay shout or a fear spell. You could try all those type of things if you really want to try and save your NPC's. I never attack anyone the guards are fighting unless it is a dragon or vampires, they never seem to appreciate the help.

Edit
My first character lost both Alvor and Gerdur very early in the game to a dragon attack.

I think the logic here is kinda messed up. If you intervene on one side or the other (say, bandit vs bear, conjurer vs atronach, etc.) then the side you intervened on behalf of should not become hostile. Instead, they should have some line about how normally they would have just killed you, but they are grateful for the help and will let it slide just this once.

My first few times meeting the Traveler I was afraid if i attacked him before he attacked me, the guards would turn hostile. Finally, I firgured out I could attack both thieves and travellers without consequences.

lol On one go through I think I lost the entire town to dragons. It was kinda cool seeing Sven go flying through the air. Losing Faendal and Alvor were harder to take.

This happened to me except it was a Riften guard vs Imperials, and the townspeople fought the Riften Guard

I saw something similar the first time I went to Riften after finishing the Fort Greenwall quest. But I don't remember the townspeople getting involved, just the Guards.