kemperbad is not a major trading port.
Acting smart is differently to acting like a coward. Your definition basically makes everyone cowards, all the time.
You need to reread my definition
Best case scenario: he lets us go. We can still go to kemperbad.
Which would mean that there would not be any legal problems with Kemperbad again. Not a bad thing for people interested in trading.
Bad case scenarios: they take billy, leaving us unable to pilot the ship. They take our cargo. They take our money. They take our boat. They arrest us. They flog us.
Most of them are bad, the main one being that they take the boat + money + cargo. However they are unlikely. It is much more likely that we will loose our boat when we return to Kemperbad now because we refused to stop.
Worst case scenario: we all die.
It seems unlikely.
Now:
Best case scenario: he was out of his jurisdiction so we are in no trouble at all. When we go back to kemperbad, if we do, we prove him to be corrupt, get him arrested, and everything is fine.
So he was out of his jurisdiction but I think that our chance of proving him corrupt is now completely gone because
A: Everybody is going to ignore mild low level corruption because it is so common
B: He has much more social standing in Kemperbad than any of us do
C: He can accuse us of smuggling and his proof is that when we were confronted by the law we fled to hide or sell the illegal/smuggled goods that we had on the boat rather than obey the law. If we go back to Kemperbad it is likely that he will have accused us of smuggling, which is something that we would be powerless to stop. Therefore it is likely that we face a massive fine or the loss of the boat when we return to Kemperbad.
Bad case scenario: we cant go to kemperbad
Not being able to go to Kemperbad is not just a bad outcome, it is game over for anybody that wants to be a trade. There are only 3 major cities on the Riek which I can see on the map and Kemperbad is one of them. Therefore if we can not go there that is 1/3 of the major trading ports we can't visit. More importantly if we want to trade on the Riek we need to go through Kemperbad, something that is impossible if we can't go there. Not being able to trade with and travel through Kamperbad kills any ambition that anybody has on this boat of trading on the Riek.
Also it could do, I believe, serious damage to Klaus' claim to have his lands restored. The powers to be are going to look much less kindly on restoring estates to somebody that is a proven smuggler as Klaus no doubt is at the moment.
Worst case scenario: We get pursued and arrested by the river patrol. But we haven’t done anything wrong.
So far we are guilty of resisting arrest and smuggling. The fact that we are not smuggling could well be ignored as we have
a known smuggler on board (after all Billy must have been found guilty of something to loose his boat) and have proven our guilty by fleeing when confronted by the law.
This seemingly unimportant action could have a massive effect on the future of the characters of this story.