Instigator

If a squadron is at distance 1 of a ship equipped with Instigator and is engaged with Valen Rudor and no other squadrons, that squadron cannot attack Valen Rudor but may attack the ship equipped with Instigator or any other ship at distance 1.

If a squadron is at distance 1 of a ship equipped with Instigator and is engaged with Valen Rudor and only engaged with squadrons with heavy, that squadron cannot attack Valen Rudor but may attack the ship equipped with Instigator or any other ship at distance 1.

If a squadron is at distance 1 of a ship equipped with Instigator and is engaged with Valen Rudor and one or more non-heavy squadrons, that squadron cannot attack Valen Rudor, the ship equipped with Instigator, or any other ship at distance 1.

Reference

If a squadron is at distance 1 of a ship equipped with Instigator and another enemy ship, that squadron may attack either ship if it is not engaged with any non-heavy squadrons.

Reference

Squadrons can attack this ship if they are not engaged by an actual enemy squadron without heavy in the play area.

The Intel keyword does not affect this ship’s ability.

When enemy squadrons are at distance 1 of a ship equipped with Instigator, these enemy squadrons are engaged by 2 “ghost” squadrons. Even if the enemy squadrons are not engaged by physical friendly squadrons.
Enemy Squadrons with Grit or Intel at distance 1 of Instigator cannot move away from Instigator. Intel does not affect this ship’s ability. Enemy squadrons are not prevented from attacking Instigator unless there are other valid squadrons without Heavy in range.

Friendly squadrons with the Swarm keywork do resolve with the “ghost” squadrons.

Even if an enemy squadron is completely within an obstacle and would otherwise be obstructed, it is still treated “as if” engaged due to the wording “even if they are not currently engaged”.

In regards to Instigator and Valen Rudor: If an enemy squadron is at distance 1 of Instigator and engaged with Valen Rudor, Instigator’s “ghost” squadrons prevent the enemy squadron from attacking Valen Rudor. However, if a squadron has no other valid targets, they can attack a ship (in this case, Instigator). Because a squadron must attack a squadron “if possible” before attacking a ship.

Advanced Transponder Net does not interact with Instigator’s “ghost” squadrons.

Admiral Chiraneau ability will allow squadrons to move, even if in range of Instigator.

Tycho Celchu is not “prevented” from moving by Instigator.

If Malee Hurra is at distance 1 of Instigator, the Malee Hurra ability is prevented from resolving. As Malee Hurra is engaged by the additional squadrons granted by Instigator.

How does this card interact with Heavy Fire Zone?
The “additional” squadrons still give engagement, however they are not considered “friendly” to any fleet. So any enemy squadrons engaged by just Instigators “additional” squadrons would be viable targets for Heavy Fire Zone.