The show itself was pretty vague on it, and pretty much everything (beyond confirmation of some of the acts themselves) we hear about the power come from a potentially unreliable narrator, so it's hard to give a definitive answer. The character is extremely loosely based on a Marvel villain, however, the differences are so drastic as to be practically different characters (the original had telepathic and telekinetic abilities but no specific 'evil radar' that I can find).
However, the first time we hear about the power, Erik says this:
I just I sense it. The darkness in people. The shit they've done, are doing, or will do. The worst ones they have no guilt. What I see, I feel is a void, a lack of humanity. And the closer they are, the sharper the needle in the back of my eye.
Now consider most of the time, he has no idea what any individual person has done. In fact, one of the earliest experiences after he got his power was with his own father, a man who he worshiped all his life.
After I got it, my power, I came home from college and the first person I saw was my dad. The guy I worshiped my whole life. And I nearly puked from the darkness coming off of him. I mean, he was my dad. Took me fishing, headed up his fantasy football league.
Obviously, he got his power somewhere in college (or he'd have encountered his father before then) and his father couldn't have been the first person he used it on (otherwise he wouldn't know what was happening), so he probably had some sense that 'bad people' made him sick (and there may also be a specific perception of 'darkness' but it can't be that specific or he'd be far better at guessing what people have done).
But he specifically mentions 'the worst ones they have no guilt.' Which means that he can't specifically be sensing the instinct of "I'm a horrible person because I've done all these awful things"... if that was all, he probably WOULD trigger on Jessica a lot more. But it could, mand I believe does, work in reverse: that feeling guilt, torturing oneself, mitigated his sense of somebody's badness. It's probably not SOLELY guilt (or completely innocent people would trigger it), but probably some combination of "an awareness of/willingness towards doing something society would consider bad" and "not feeling guilty."
We, as an audience, can't really detect somebody's guilt... the embezzler, for example, seemed like she felt guilt, but she could merely be performing, looking for mercy (for that matter, embezzling might not have been the worst thing she did, just the one that was easiest to get her to admit).
But we can look at specific examples with this theory in light and, with a little speculation required, it seems to track well:
Jessica: Has killed and done other bad things, but tortures herself (at least when it causes actually harm to people) and doesn't want to kill.
Trish: Has, at the start of the series, killed Jessica's mother... but, despite claiming otherwise, probably feels a lot of guilt for it (if not for the act itself, then for hurting Jessica). Her deleted variations of the letter-to-Jessica imply that a lot of her "I DGAF, I did the right thing" was bluster. At first, she wants to bring people to justice rather than kill them. However, as she starts to kill more 'bad people' she begins to feel justified in doing so, and thus, feels less guilt about it while still being aware that it's wrong and she has to keep it a secret.
Salinger: Sociopath, no guilt, but obviously aware that murder is considered wrong, otherwise why hide it.
Embezzler: Again, we know very little about her, so I'm just going to exclude her.
Child Exploiters (various): Probably low guilt but a lot of awareness that what they're doing is wrong.
Malcolm: He does feel guilty, but he's a lot more mixed. He's clearly struggling with guilt over what he does for Jeri but willing to do it anyway. He's also got a history of drug abuse and harming people that he probably struggles with whether he should feel guilty for it or not (in part because a lot of it was caused by mind control). Also, at the point Erik meets him, he's recently essentially caused a car accident with the deliberate intention of harming another person, but probably doesn't feel very guilty about THAT, because the guy was a scumbag who keeps drunk driving and getting away with it because he's rich. There's also one other factor we need to consider: Erik. After all, when he makes the judgement of Malcolm's "badness" (only a 3 on a scale of one-to-ten), he's a guy that's being asked to keep Erik's sister safe. Who wouldn't be a little extra paranoid about that? We don't get a followup analysis of Malcolm's score, even when he later encounters them and they're living together.
Brianna (Erik's sister): Never an appreciable score given, but he doesn't seem uncomfortable in her presence. Has probably done a lot wrong, but probably feels (inappropriately) guilty for the various family implosions.
One more thing I think deserves consideration: Erik might not consciously know what people have done. But he might unconsciously know. That is, his power could specifically be to read minds/histories, but as some measure of protection, his memory blocks out the specifics and only lets him perceive an amount of pain related to his own moral perception of those acts. The 'score' Erik gives could then, essentially, be Erik's own, personal judgement of them if he consciously knew all the details (including how much guilt they feel). If he knew what his father did, he'd have been sick. If he knew what Malcolm did, he'd be pretty wary. If he knew Trish had murdered Jessica's mom... well, you know, she WAS a threat to everyone around her, he might have wished there was a better way but he might not fault her for that. But if he knew she was killing criminals because she was starting to enjoy it and feeling justified over them all? Maybe not so much. His sister? He knows what she's gone through, she gets a pass for life. And Jessica? Well, he'd see what we've seen, and generally we root for her and consider her the hero.
While this theory has some merit, Trish still seems like the weak link here, because (absent the sociopathic enjoyment theory), Erik himself seems to somewhat approve of her doing the murdering, or at least enjoy the sensation of the world getting 'better' when she kills a bad person. He tells her it was a good thing and is probably responsible for her getting worse. Of course Erik's not immune to the self-deception, he might well push her down a path he doesn't actually approve of for his own benefit (like when he blackmails bad people but doesn't stop them from doing it), because he's not sensing his own darkness.