One of the first rules of game design taught is to design the game in a way that it makes it easy for the end player to pick up and interact with. Friendliness to the player is what makes a huge impact on first impressions. This idea isn't to be considered the same as game difficulty however. That is a completely different subject.
Friendliness of use describes player interaction, mostly with the GUI and controls. If moving the avatar around in the world feels clunky, they get stuck a bunch, or just downright doesn't work intuitively, then that will throw many players off to the game and they will leave for other ones. The concept goes deeper tahn that, I'm summarizing here for brevity.
You have to balance "proper roleplay etique" with ease of use. The example of unsheathed swords in town as example. Now, the guards at the gates reminding the player is a good start, but really the default UI should come with a pre-programmed button to auto sheath and unsheath weapons for ease of use. Otherwise the npcs just seem to be annoyances to most people.
I'm not going to take a side on if players should take off the armor while townign about, but I will say that whatever you decide, the decsion should be supported in the root game mechanics to make the rules of the game be as friendly as possible to the player.
PS is in that funny half way transition period where the community/devs are still trying to flesh out all the rules for the game, while at the same time trying to decide how they will fairly implement them.