No worries, MDSection12- I think the authorities are able to determine if someone is a thru hiker, section hiker, day hiker or living on the trail. We have/ have had some people, in my area, that are doing the same thing. It's illegal but no one can prove it so easily or they just don't care enough to go after someone for doing it.
It creeps people out, including myself, if there are people, on the trail, not using it for it's intended purpose. Having said that, if I found myself homeless, I would so try to live on the trail or in the woods somewhere... just sayin.
If this were ever the case, for me, I would try my best NOT to creep out people, that would notice me. I would be upfront and just tell them what I was doing out there.... Yes Sir/Ma'am, I have no home, I'm living on the trail- No better place, I'd rather be.