What about the case of Venice? NO Settlers allowed. All Venice can directly take advantage of is the 3-tile radius out from the city center. If early in the game, a DoF partner is edging a Settler into that radius area, and when Venice says "Don't settle near my cities", which is then sneered at, what's Venice going to do? Roll over and play dead? Let that side of Venice's growth potential be stolen?
I think it's important to distinguish between someone behaving like an @$$ and you being justified in DoW'ing him without anybody caring. While I do agree that one could call the most proximate tiles around your capital within your sphere of influence even if you haven't claimed them yet, I don't really have a problem with someone tricking me by asking for a DoF and then when I give it, plays me like a fool and does something to take advantage of me. That's him being an @$$, and he should face the consequences which might be me DoW'ing him - and if I take that path, I'm ok with getting a warmonger hit for it.
That's not saying everything is perfect in the game, because it far from is, but I think it's very delicate how these things are tuned. One thing I've been asking for for a long time is the "denounce" function being tied up to a specific list of actions, and not something you just do at will. So if someone claims land immediately next to your capital, that might be valid reason for denouncement. And if someone I have a DoF with does something that gives me reason to denounce him, that should be reflected negatively on
him, not reflect negatively back on
me (I don't know if it still does, but at least at some point, you'd get a negative diplomatic modifier for denouncing one of your DoF friends, which is just plain nonsense).
About warmonger penalty, I think it is fine as a concept. What I don't like is how it is implemented. As has been discussed ad libitum, it decays way too slowly - WP should not follow you entire game (unless you consistently acts like a warmonger), but should be a temporary penalty. I hate how capturing a city gives you gazilions of WP, even more so if it's the last city, while the act of actually DoW gives you next to nothing - that should be the exact other way around. But these are numbers that can be tuned - and obviously, if the act of DoW'ing someone becomes the action that gives you the major warmonger penalty, this also makes the Casus Belli system all the more relevant. But I also think it's fine that you DO get a penalty for DoW'ing someone,
even if he has behaved like an @$$.