Scott from the Cyclopean team explains what we can and can't do in his latest status update for the HP Lovecraft-inspired RPG over on the Iron Tower forums. You cannot...
You can't just start combat and up and shoot anyone you see at any time. While in the real early 20th century, it may have been possible to shoot a group of civilians in the street and then disappear, you can't do it in Cyclopean for the simple reason that you would never be able to complete the game without access to the very few urban areas. I had originally conceived of a system where if you attacked someone in town during the day, they would shout, the police would arrive and you would engage in a battle which cannot be won. It would mean a ton of extra scripting in pursuit of a pointless exercise.
This doesn't mean you can't kill innocent people (wherefore the Serial Killer then?), merely that you have to be circumspect about it. You have to be inside (in town I mean, in the wilderness everyone's fair game) and you can't fire a gun. Self defense still applies. If someone else attacks you, you are free to defend yourself any way you like. There is also the possibility of getting into non-lethal combat (fisticuffs) if you have a disagreement with someone, instead of knifing them.