The NPCs on Principal Island that don't trust you run away from you (slower than you), then they stop at a certain point and stare blankly in space, then they walk back. Since the player can easily reach them, their running away looks broken and less emotionally impactful.
~~To align with the behaviour of the original game (where they were faster and ran out of the zone), they could run and disappear when they are behind an obstruction such as the wall of a house, or a large prop. The player wouldn't see how they disappear because they would be obstructed already. Then they wouldn't be on the street for a while, and can respawn when you change zones or when you go far enough (to the military camp or to Funfrock's headquarters) - similar to the way LBA2 NPCs respawn but with even bigger distance.
~~
SIMPLER SUGGESTION: They can run away but behind Super Grobos or close to them and wait there. They could both go close to the bar for example. This way they would be unreachable to you (which is the whole point). And they can wait a bit longer before coming back (say, 4 times longer).
This is additional work BUT it's a strong emotional moment in the game that can be improved to be as impactful as in the original LBA, rather than to look broken and cheap as it does now.