Given the relative challenge of keeping an overview of where everything is inside a fight I find the approach to this suggestion rather counterproductive.
Inside a swarm of hostile targets it’s quite hard to identify what is what and where it is. From further out it’s much better now due to the UI changes from a few months ago.
I think the main reason for this suggestion is that the person often does not know what he is targeting. Approaches the target and only then notices. Even with the ship on screen, in rare cases there can be some ambiguity if a ship behind it is selected or sometimes there are obstructions.
Also one big thing that has to be noted … once a ship is selected, there’s no way to identify its class except for deselecting it or identifying it visually. The “Targeted” marker is identical for every shiptype it seems and the “fixed info panel”, or something comparable, is not implemented yet.
I oppose anything that makes it harder to grasp what is going on around the player. Having a selector filter so that “target closest” only targets specific sets of ships or something like that, maybe even configurable for the player, that would be cool and all. Reducing opacity of everything else isn’t helping though, in my opinion.
Now, the reduction depending on distance and size of a ship class, that I found helpful because it conveys more information to the player.