"Chasing ships that are on the other side of the island" seems to me a more general game issue, which is why I am proposing a more general solution.
The Standard Storyline Blockading Squadron is just the most obvious example.
As far as I can tell from the code, this instance is the ONLY one of "range 4" being used anywhere.
A spyglass (in Realistic Game Mode) should not be able to tell you
anything about a ship until you get within "range 3".
So we could set that value to 3 instead of 4 and see what it does.
This change would not STOP ships chasing each other; it would just make it less easy for them to notice each other and do so.
If enemy ships get closer, they'll still give chase.
If you do play Realistic Game Mode, have have a look through your spyglass to see at what range you can see "ship type" (within range 3) and "nation" (within range 2).
That would give you a better feeling for how those ranges are defined. My thinking is that if
you can't see
them with your spyglass, they shouldn't see you either.
And definitely not give chase. Again, this applies equally to player-to-NPC and NPC-to-NPC.
If (almost) every ship at sea is always chasing
something, that does seem a bit excessive to me.
That also means that any "patrolling" navy ships will hardly ever be seen patrolling, because they'll start chasing
real soon.
And while courageous merchants may go and attack ships on the other side of the island, regular merchants will try to make their escape.
Again,
from those hostile ships on the other side of the island.
And I doubt you'll EVER get to see any ships peacefully proceeding to their anchorage and then staying there,
because unless there aren't ANY enemies around in the scenes at all, they'll probably be either chasing or running away before they ever get to the anchorage.
In other words: I fear that the whole clever "Improved Sea AI" functionality that
@Screwface did
basically gets reduced to "chasing or running away" simply because of an excessive visibility range being used.
Note that the range at which ships see each other depends on the skill of their captain.
Navy ships would probably have better captains and therefore would spot potential targets sooner than merchants.