My aversion of shooting with a Leica is not about other folks recognizing the brand. Ok, I guess that might be a tiny sliver of it, certainly less than 1%. Another maybe 2% would be just making myself a target for thieves, but as you note, most folks don't recognize the significance of the red dot and I assume that holds true for most street criminals. The remaining 97+% is mostly down to my own understanding of what my needs in a camera are. Or maybe that's just how I keep myself from catching a case of red dot fever.
I'm broadly generalising, but common street thieves don't know what they're stealing.
I saw this article in the news a few days ago where some valuable art was stolen from a museum, one of those pieces of rare art was found on eBay for $250:
'We didn't expect to see it again': Stolen Napoleon art bought on eBay for $250 to be returned to gallery
Art sleuth Leigh Capel says it was a "jaw-dropping moment" when he realised a portrait miniature he had bought online had been stolen from a Victorian museum eight years earlier.
Street thieves are just targetting tourists with big fancy cameras, I can't imagine they'd know what the red dot means. I've never seen any logic in putting black tape over the dot.