Historically, being recognized by strangers has resulted in one of two outcomes for Loghain: he's either been in for an attempt at a fist fight, or a naming of names of those left dead in the fields of Ostagar because of his decision. Occasionally someone forces him to relive other travesties from his past, such as the purging of the Denerim alienage, but thus far he's yet to have an assassin go through the trouble of introducing himself before attempting murder. Kostos would be the first--and, truthfully, he strikes him as the type.

It takes him a moment to realize that the young man's intentions are somewhat different.

“I have heard that Grey Wardens are lonely. I have also heard that they cannot walk through a village without being propositioned twice. Both can be true.”

Slowly, cautiously, Loghain responds with, "I'm not sure I understand," and meets Kostos' dark eyes, studying him in silence. It's a lie, of course; he understands quite well, but understanding doesn't constitute belief, and Loghain can't believe that anyone, much less a handsome young man, would seek out his company for... those purposes.

(It's entirely possible--likely, even--that Loghain is unaware of how his eyes followed and lingered on Kostos during their journey today, or how fixedly his gaze remains on him now.)