I'm having a very, very, hard time believing some of the comments in this thread.
In one of the, repeatedly, scripted shootouts; I wandered in there just to see if anything had changed about these "totes random encounters of a living breathing city." The officer and Maelstrom were standing around like a group of actors, unaware that the director had finally arrived, idling in place. Instead of shooting one another after realizing I was on set, the gangers immediately aggro'd me... and the officer became suspicious of my behavior as they riddled my cover with rounds and one even tossed a grenade which caused the police cruiser behind me to combust. He was onto me though, steadfast in his resolve to get to the bottom of who stepped on that wad of tissue paper. He'd finally had enough of my antics and began firing away. I would've helped him had he just done his job, instead he died that day... prompting the NCPD to descend upon me and it was shoot out at the Okay Corral from there.
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No - the police system in this game is not fine, nor reasonable, or even consistent.