Free looting anywhere, as long as you've used the stealing skill, and you're in the Thieves' Guild. It's almost like a perma-flag after that, and you can be looted anywhere. I found this not only with my own thief, but during the Magincia invasion. A few RPers with stealing that didn't stay alive were able to be looted by anyone - call it a harp back to the bones days, but I still check everything to see if it can be looted.
Of course, stealing from another thief, alive or dead, is still completely against the Thieves' code, or at least as to how it used to stand. So I simply warned the person in question to be careful, especially as they had some half decent uninsured bits and pieces on them.
But yes and no, it's pretty dead to be a thief. It's a long time since being naked with a DP kryss was a good template...