Yes it goes fine with the idea of honor among pir... err, privateers, as the militias are explained above by Shaalira (I like!). But for those in FW who want to roleplay the idealistic national soldier and advertise as the 'good guys' fighting for the only 'noble cause' in the cluster, etc., they get into a bit of a pickle, no?
I'd be impressed if the nationalistic fervor is just a smokescreen, and I'll have to look it over again to see if the option is still open to it, but I have a feeling it is not.
It's likely my poor understanding of how the CEP and State Pro relate, but I have a difficult time figuring out how to interact with privateers who hold up their letters of marque and declare they are the more noble or patriotic pilot... not that it's in any way wrong, I just find it tricky to navigate.
I will try interacting with FW pilots as if they were fringe national mercs and we'll see how it goes.
In any case, while I find slinging accusations on IGS makes for boring diplomacy, at least it makes for interesting combat.