You loose reputation, if someone sees you stealing.Karma isn't used for stealing / in general, right now.
Well then it should be defined somehow what it means "if someone sees me stealing". If that means players/guards need just to look at my direction then whats the point of stealing?
And I don't know if what you say about karma is current change or its been there from the beginning of this season.
"If someone sees you" means, if your stealing roll failed.
We don't use karma since we introduced the reputation system.