Sound will propagate, just not through undisturbed vacuum. Explosions generally create a cloud of rapidly expanding gas, and that would be audible. It would not be as loud or travel as far as an explosion in an atmosphere, but within a certain distance you would hear it. Further, sound propagates very well through metal, and spaceships generally have atmosphere inside them. If something hits the spaceship you're in, you'd hear it. If something explodes close to your ship you'd hear it. You'd also absolutely be able to hear weapons firing, engines operating, and anything else that vibrates on the ship you're currently in. Any engine that creates a pressurized exhaust would be audible from outside as well, though in most cases I'd imagine if one were close enough to hear it they'd be killed by it because of temperature or radiation.

The problem is not everyone agrees that it's the correct line, there are several options. Even when there isn't much consequence to the distinction, people can't agree on it - see Blue Origin and New Shepherd.

When talking about international law, there's even less agreement. The mechanism for creating an international standard isn't particularly clear, nor are enough nations probably willing to agree for it to be feasible at all.