The rest of the staff have already posted excellent responses to this topic. However, I thought of a couple of things I'd like to add.
Lapis (and all other players) its always good to ask questions about the rules we've come up with, it invariably sparks discussion and sometimes those discussion reveal new ideas. NarniaMUCK only gets better that way. It also helps other folks that...sorta had a question but couldn't quite put it into words--either your question mirrors theirs, or in the course of discussing it, we-as-a-group answer theirs. Everyone wins.
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The alt privacy rule lowers the 'penalties & risks' for learning players. This is very valuable for younger players or players who are very new to this kind of role-playing. Frequently, such players will stumble over "this rule" or "that rule" and fair or not, it earns them a "reputation for being a poor player" even though by the time they've stumbled around enough, they've got it figured out and they'll be a good (and someday, great) player thereafter.
Without alt privacy, the player may have to go an entirely different world to escape their "reputation". That becomes a loss for NarniaMUCK--we pay out the time to teach them, but some other world reaps the benefit of having a new-but-experienced-in-role-play player.
With alt privacy, a player who's new to the entire idea can learn from his/her mistakes with the first character, but doesn't have to flee. The player uses another of his "alt slots". Odds are, the second character is leaps and bounds better and the new alt becomes a active part of many RPs. The player gains experience, we gain a experienced player. We both win.
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This sort of rule is an "all or none" rule. It can't be made optional, it has to apply to everyone or it won't work. If you kept all but one of your characters secret, for instance, it'd be moderately easy for other players to know about your secret character. If some people keep theirs secret but others don't, again it's moderately easy to know about the secret characters. In many cases, we won't even think too long about it--we'll guess it almost automatically.
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I acknowledge--the mystery of secret alts "invites" the desire to guess who is who. We love mysteries and we love figuring them out. Its our natural inclination--but we ask that players try not to do so when it comes to alternate character identities. Remember that the rule is "Don't ask about alts, Don't talk about your alts, don't speculate about a player's alts, don't make assumptions about a player's alts". Don't ruin the mystery!