The way I see it, and think it works in theory, is that if you do missions from one faction that negatively affects the other, you will see reputation effects and in theory could get to unfriendly and hostile territory with them. But if you are choosing missions that help the Empire, without being harmful to the Federation, and vice versa, I don't see why they should get you to choose. technically, you are merely a freelance contractor working to make ends meat, not an official employee or representative of the Empire or the Federation.
If however, the game allows you to destroy multiple Feds and have them simply go "well, you were doing an Empire mission at the time, no biggie", I would say that it needs to be fixed/modified.