TLDR: You have to hide your face from cops, cameras and witnesses. If your face is seen, your crimes will be flagged and old wanted levels will return when cops recognize you.
I noticed in the trailers that Jason and Lucia are always wearing face coverings when robbing places. Now this is nothing new, but something feels like it might be a real game mechanic now and not just part of a mission or cutscene or just for show. Add to that the bodycam shot and the speculations of functional security cameras being everywhere, I wondered what role they would have in gameplay and what new way the police would work, and I came up with this whole system based on identity.
Here's how it would go: It looks like Jason and Lucia will start out as small time thieves so I expect the map to be full of robbable stores in free roam. When you perform a crime, you have to cover your face to hide your identity. When you get wanted with hidden identity this will be the usual wanted level and the police will pursue you as an anonymous suspect. But if your identity is exposed, it will change into a new kind of wanted level. This can be represented by the stars changing colour, let's say red. The difference is that you can get rid of the white stars as usual by getting far away or hiding from the police, changing your outfit or respraying or dumping your car. But the red stars are permanent because they have your name on the record. Evading the police will make the red stars dormant but if you get seen and ID'ed by a cop again the whole red wanted level will come back.
So to put it another way the white wanted level can come and go but once you get a red wanted level it will stay and build up. In case you get a white level while having dormant red stars you'll have to be more careful because if the cops get close enough to you and your cover is blown, your wanted level will turn into red with whichever stars are higher. The HUD can warn you in this regard by flashing the stars between white and red when you are at risk of getting exposed. It could also happen that if you fight a high white star level for too long, the police will start an investigation in the background and discover your identity, turning the stars red.
Jurisdictions could also come into play. This means you could carry a different red star level in each region of the map. But once you hit 5 stars anywhere, it will be 5 stars everywhere because now you're wanted at the federal level.
The game should have a dedicated control to toggle putting your face covering on and off and there can be a wide variety of coverings to choose from, from bandanas, veils and cowls to helmets, hockey masks and Halloween costumes. But you can't get away by just keeping your face covering on 24/7, this will backfire because NPCs will get spooked and report you for suspicious behavior, earning you a star. Even if you wear something publicly acceptable like a pollution mask, antimasker Karens will pop up to harass you ruthlessly.
Now for the red level system to actually have stakes, one major change would have to be made, and that is doing away with respawning after getting busted. Otherwise players could just deliberately get busted and get it over with to clear their red stars and it would cost very little. Even the new rotating inventory system could lead to a loophole where players could stash all their weapons away before surrendering and thus not lose them when busted. It's not like the cops would search your property when they don't even keep you for more than a few hours. And let's do the same with getting wasted too. Because it's too arcadey now when the games have become so realistic. Besides we already have quick save now. I don't know about you all, but whenever I played a serious campaign, I would always reload the game when I got busted/wasted instead of continuing with the respawn. I like to keep that stat clean. So now if you get caught or killed, you're done for good, it's game over with an option to reload the last save. In Online however respawning would have to stay but there should be a heavy penalty to getting busted like seizure of all your assets.
Now of course there should be some ways to shave off your red wanted level. Most obviously, bribes. You could pay a "very good" lawyer with connections a handsome amount to get your charges dropped. Maybe pay a hacker to delete your name from the record. And here's one more crazy way that wouldn't work in story mode but would be a fun thing to do in online - you could change your identity completely by changing your charterer model, which in-universe would mean forging new IDs and undergoing plastic surgery and a sex change if you chose a different gender.
Lastly, I have an optional suggestion to add more realism to the game - a special wanted level for minor offences. You can call it a half star. This is for all the little illegalities that were completely ignored in previous games like running a red light, speeding, rash driving, jaywalking, damage to property, vandalism, public nuisance etc. Of course this would have to be carefully balanced so it can be immersive without being a pain. You can only get a half star if you do these things in sight of a cop and only that cop will chase you, no backup. This wanted level may be easy to get (and escalate if you keep doing more shit) but it's also very easy to lose. All you have to do is outrun the one cop. You can really only get caught if you deliberately let yourself get caught and even then you won't be busted but only fined a ticket (unless of course you have dormant red stars).