How does stealing work?

Erythema

If I am caught stealing from a container I can never return to that house / room right? That NPC is always hostile. Can they ever become non hostile? If I split the party and steal with one person, does just that one person become labelled a thief, can other characters go into the house without consequences? If I pick pocket someone in the street and fail does combat begin every time I see them in the street for the rest of the game? Can I split the party and if that individual is caught dismiss the caught thief from my party and continue walking around?

kuchikirukia

As far as I know they are flagged hostile to you, which is to your party.
They will never become non-hostile except temporarily (and largely uselessly) if you charm them. You could lead them into an empty building, charm them, and leave them there.

You may be able to dismiss a party member near them and the two might get into a battle with no rep loss or turning anyone else hostile.

The Rogue Rebalancing mod can update thieving so the penalties aren't so drastic. The fact that in the unmodded game even 200 pickpocket isn't a sure thing against anyone makes stealing a dice roll with some pretty annoying consequences.

Allanon81

I think pickpocket even with mod if you roll a 1 you’ll always lose right?

Grond0

@Allanon81 it's certainly true in the unmodded game there's always a chance of pickpocketing failure - see here for details. Stealing from stores is safe if your ability is high enough.