I would like to know about the acceptability of a person living as fully Jewish before a conversion. I know someone who did: Payos, Side-locks, Kippah, etc - fully as a Jew. Is this common? Are there those who do this without ever converting and/or without intending to convert?
While someone is preparing to convert, his rabbi will have him take on various Jewish observances. This is because you can't just dive in full-force and expect to thrive; it's one thing to learn intellectually about prayer, kashrut, Shabbat, business ethics, speech, modesty, and so on, and quite another to integrate them into your daily life. So a convert "in process" starts keeping mitzvot, even before they are obligatory, under the guidance of a rabbi. (Source: many converts I've known personally, and some local rabbis who are involved in conversions.)
There are some restrictions, things a person can't halachically do as a non-Jew. The person you know, assuming he's working with a rabbi, is probably not 100% keeping mitzvot -- it's just that the things he's doing differently, or not doing, aren't visible to you.
Are there people who take on the outward observances and appearances without converting or intending to convert? Probably, but we -- people in general, let alone people on this site on the Internet -- aren't in a position to know that.