It feels like there is a threshold somewhere in between the Duke's guardsman looks at you with a scowl, and the Duke's guardsman just lopped off your neighbor's head and says "your turn, tell me where they are".
It feels well closer to the later than the former, but still has a lot of space around it.
You sidestepped there. If the Duke's men are scowling, why bother hiding? By your arguments, if you actually want to hide from something, it's too big a threat for Rustic Hospitality to not void itself. That's not a strong argument.
You're effectively deploying the precautionary principle, here -- that any chance of risk has to be addressed as if certain. That's not a strong argument. That the Duke's guards might suspect you, and might come and threaten you, and might kill you is sufficient to be a justification to trigger "risking your life" then there's never an application of RH that can exist. But we have the ability, so that's clearly not the intent.
This is exemplary of a string if arguments made in this thread against the RH example being MMI that all start from the conclusion that it isn't and then work backward to find anything to hang that conclusion on. It's not arguing from first or even second principles, but an exercise is justifying a desired conclusion. With this, we can clearly see the fault because spells like charm person have similar wording about risking life but no one is arguing a multi-step precautionary principle that says a thing that might happen, however unlikely, is sufficient to void those. A player making that argument to sidestep charm or dominate would be quickly dismissed. So it isn't first principles driving this.
But, putting all of that aside, and taking the argument as valid ad arguendo, there's still a problem: you still have the GM selecting a specific set of fiction to threaten townsfolk to void the ability when there are other, equally valid fictions that can be selected. This means that use of tge ability is entirely gated behind the GM's agreement to let it happen, and only to whatever extent the GM wants it to happen, turning this ability into an ask of the GM for permission to deploy it. That's MMI.
And might well not be a problem or issue for a table. MMI isn't about liking what happens or not -- the children's gane doesn't change to a different thing if you like playing it or not -- but about how authority over the fiction is apportioned. That can be fun and good for one table and bad fir another with exactly that same fact pattern in play. Insisting that MMI only be negative is silly. It's not only negative. But like all things, if you don't like how play is happening, you're much more likely to call it out. The claim MMI is only negative is survivor bias.
"Or maybe a ring of it?!
