It should increase your rep 1 per kill with NCR/Hub and other towns, but not higher than 1000.
Or they should make rep diminish while you're online, because only when you're offline your rep diminishing.
Sha Enin bothering you again?
I agree with you on the diminishing reputation.
It's kind of getting punished for playing that character.
I say a +10 on rep for every town/faction your opponent has a lower than -300 (antipathy or worse) reputation with.
A -10 reputation for every town faction your opponent has a better than 300 (accepted) reputation with.
Reputation can't get worse than -300 or better than +300 this way.
To prevent abuse, you can only get this reputation increase/decrease from your opponent once every 24 real life hours.