In my point of view, having the green bubble indicator always on is not a good idea. Imagine a situation that you are in combat in serried buildings, it would be much of an disappointment to know which builidng is full of friendlies and enemies before actually going in. Having the indicator only visible when aiming may be better. However, I think teamkilling is not much an issue after players get used to the game. Afterall, a player should be able to distinguish the uniforms, and if not, make his/her decision to fire or not.
I agree with the building thing in a sense of seeing all your teammates in the building because the indicator HUD is visible instead of just walking through the building and see your team has cleared it. I think making the indicator only visible when seeing a teammate in person instead of through walls would overall solve the issue and bring in a good balance of realism and playability. You're right with teamkilling not being too much of an issue for older players, but the problem is there will always be new players in every form so it will kinda be unavoidable (que RO2 teamkilling flashback ptsd) and with night matches it will probably be even harder to distinguish friendlies. However, I can see your case of it possibly ruining a sense of deep realism.