What kind of fr5 are we talking about? Reversible one to -0.9 or the evil one to -1.0? Which one is applied as a RP consequence?
If the usual fr5 procedure is to set rep to -0.9, then I find it perfectly acceptable. After all, the law enforcer did went through all the bother and invested time in gathering and posting evidence and all that. It's just normal if I find my trade being more difficult within said house till I sort my rep back up (find a respective bribe, shoot unlawful NPCs, bribe that passing Rhino to take a mission for me, etc). Tempering with identity is a nice part of smuggler's RP.
If it's to -1.0, then I'm sad and want to bite admins for allowing such absurdity. It's simply a way of saying "We win lol, go play somewhere else"