The alarms in Strife are simply a notice for enemies. They are normally activated after the player fires a non-stealth weapon, which is any weapon besides the punch dagger and the crossbow's poison bolts. Alarms will also sound if a player walks through an alarm trigger (often a green doorframe, or going through a yellow doorframe without a guard uniform). When an alarm sounds there is an audible noise, and klaxon lights throughout the level will flash red.
When an alarm goes off, nearby acolytes and templars are alerted to the player's presence and attack, while shopkeepers shut their shops. Robotic enemies such as the stalker and crusader attack regardless of whether an alarm has sounded or not.