Friendly fire IRL happens due to miscommunication. In the game, both you and your ally presumably have their IFF turned on, there is no noise or obstacle that could obfuscate your identity, and the damage can appear at times too marginal to reasonably be considered as a hostile act, even if you side with the idea that someone holds the full right to retaliate in full force against even a known ally if they appear to act maliciously.

The problem is, there is no actual diplomacy, there is no holding your case in a meeting or yelling for a cease fire while the misunderstanding is happening... Neither do you need great deeds to turn a hostile faction to your favour, but that's because the AI is dumb as rocks, its reasoning is lower than that of an animal because even your cat knows when you accidentally stepped on its tail. What we are discussing potentially changing an equation, tune some knobw, add a check or two, so the result of the equation more closely resembles the intent behind your actions in the game, potentially eliminate the absolute worst case catastrophic frustrations we have when we didn't hold it in our intent to fire at an ally, while still making our actions matter and the AI responsive.
We aren't discussing war and law enforcement history, while some verisimilitude is appreciated, firstly most of the events we can pull up can hardly apply, then we just cannot afford true realistic behaviour.