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Actually, hmm, it was quite obvious that under such conditions of equal players and a neutral GM, nothing good would come of it, because everyone would try to come up with sophisticated ways to get out of any situation. If there was a full-fledged wargame and diplomacy mode in the game, everything would be much simpler.
In short, it's roughly like an expansion where all players are simultaneously the main characters - "ha, your character was shot by a sniper!", "nothing like that, he has damage-reflecting armor, so it's fine."
But I don't think that this actually had such a big impact in this case; the main thing is that the government changed. And you can ignore the Imperial fleet... oh, sorry, the Kittypink fleet. Silver explained it correctly.