Can one please elaborate the 'Engi Colony Hiding' encounter?

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I've stumble the 'Engi Colony Hiding' encounter:
You notice an Engi colony hiding on the other side of a nearby moon. It turns out they're excavating an equipment cache from the Federation-Mantis War, and they suggest it might be used to lure the pursuing rebel fleet.
I can't seem to truly understand what are the options exactly (and in a critical situation):
- Booby trap the cache (-2 missiles).
- Secure the cache.
Can you please explain the story and the options?
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