The game looks and feels really good! Just wish there was a way to properly swap the targeting, not just unlock it, or somehow make it much clearer to which faction each fighter belongs
Thanks for playing! You're definitely right, the moment you start attacking the settlement the rebels should no longer be hostile towards you & targeting should update to focus on the settlement/ treat them as allies. I'll sort this in the next minor patch. Thanks for the feedback!
Edit - Fixed in latest build