I love the idea of the "Deniable Operations" technology: being able to flag mercenary ships as pirates and then harass opponents without them knowing who is responsible adds a cool espionage aspect to the game. However, I'm having trouble using them: most of the time when I attack an AI opponent with a privateer flagged fleet they immediately message me demanding I withdraw my fleet. How do they know it's mine? I always change the fleet to a privateer fleet within my own space, but does it need to be done outside of the AI's vision range so they can't "see" the fleet change from player controlled to privateer? If so it would be nice if that was included in the description. Am I missing something else?

The Ai cheats. Try against people for better results.