Zenabi was insulted by it and told me that is why they fled, but I don't think it went to the circle. I was there to fight Zenabi, but Graevnik was mad about being assassinated before.

I disagree that people not in the village can talk about honor IC. It doesn't mean the village has to care, but others can certainly judge them.

Leuoa did take it as a compliment that she didn't deserve honor. I think Graevnik had already been assassinated twice at this point. So, I took it to mean don't expect any breaks/honor when stalking near the village. Neither one of us made a big deal about it and things went on as usual. I'm pretty sure there was mutual respect between Graevnik and Leuoa.