That means they're not so far from using disguise in certain quests.
Spoiler
When I played gourmet in the Dark Brotherhood quest I decided to wear a chef's tunic and hat to make it more fun. When I killed "the target" I ran away, used stealth and changed my outfit. No one attacked me anymore until I got outside. At that point they suddenly recognized me again, oddly enough.
Wouldn't it be great if people didn't recognize you wearing another armour set so you could escape or infiltrate?
