So the same pips mean lieutenant as well as chief petty officer?
At least they were consistent about it, after establishing O'Brien as a NCO they continued to employ two pips on his uniform. When TPTB created a formal dress uniform for O'Brien to wear at his wedding, it had two pips.
One of the advantages to this would be that many of the nameless people we see about the ship over the course of the series wearing pips would be NCOs, making the ship less top heavy with officers.
Would the similarity of the rank insignia be confusing? Apparently not for them.