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I cannot confirm this with my own characters, but I have been told that FL assigns the faction affiliation displayed on the target reticle based on the last faction for which you did a mission, but IMO, it is the faction which your character is most friendly with. Most frequently, this turns out to be the Liberty Navy, because most players want to be able to dock as many bases as possible, and manage their rep's accordingly. The reticle of other players will display the color appropriate to the…