Game Mechanics: Mask of Deception

[Pyronost]

This is the mask that gives you the illusion of Dark Elf, now if Im not mistaken (as I watched a normal dark elf walk right by the NPC's) Dark elves are fine to be in the large outpost in Overthere.

Yet everything with the exception of the bankers still cons as "Ready to attack". Am I missing something here? Because the dying is certainly gettin old fast.