Yes, you must be at least 4 cells away.
Chaos_maker = too close to NPC (looks like only 2 spaces away)
Baka Jin = in the street (you must be up against the flowers to vend by the fountain)
~Bornwild~ = too close to NPC and in the street (looks like 3 spaces away, though it could be 4; either way, he's in the street, so doesn't matter about the NPC)
|Havoc| = too close to NPC and in the street (looks like only 2 spaces away, maybe 3; either way, he's in the street, so doesn't matter about the NPC)
I see no problem with the GM's ruling.
Edit: I am curious, though, why the reporter didn't report the merchant with the shop named "tindero ako" as that is most definitely in the street.
