Brandishing weapons should be illegal, keeping them sheathed or out of sight should be required in any area that has guards at the public entrances or exits.
Set different timers for different areas; when a fight breaks out guards will arrive after a period of time and break up the fight.  Guards patrolling one area can only respond to one fight at a time, this would allow for distraction fights.  If multiple fights occur then the guards will go to the more dangerous fight, if weapons are used or not, if the guards are already at a fist fight and then a sword fight occurs after the time period the guards will leave the fist fight, leaving it up to the players to the end it, and will go to the fight including weapons.