I know it's been patched, and IIRC, it was a bug, because they didn't yell at you at all for getting close to them if you were in their faction.
Obviously it's been fixed, that doesn't mean he still doesn't have an excessive amount of ammo and such leftover from his exploit of this 'bad feature'.
Good luck selling your ammo that everyone else already has thousands/tens of thousands of because of their own exploitation!