This can happen if the other player moves around too fast (especially if they have the Warp upgrades). The server only syncs movement every 10 seconds or so.
I had the same doubt (Early Access version 60 - #2 by InterAction_studios) but I didn’t get strong feedback either way. Bear in mind that, even if your badge is hidden, your license status can “leak” (e.g., if your name appears in the Ironman top-10, or if someone tries to gift you a license).