Ranks... well, they're a bit rubbish really...

[Shinji Ikari]

So the game should adopt to your style of roleplaying? Awesome ! I usually roleplay that my character is a pink fairy who just uses spaceships to fly from one unicorn farm to the other. Clearly the game needs to be adopted to that. Fairy characters and unicorn farm POIs confirmed!

Without the sarcasm: the game depicts a the world as it is seen by the developers. As i wrote above, it's not as unrealistic as some people think it to be. For large portions of history (before the binary world view created during the cold war era) the games handling of ranks was not that uncommon or unlogical. You are free to do all your roleplay within the boundaries of this world. Which most of us do by just playing the game.

And to answer the final question you wrote, i have to reply with another answer: how do you explain the example i gave further above? How do you explain that Zar Nicolas II was granted honorary senior rank in a number of foreign armies, reciprocating by extending similar distinctions to a number of his fellow monarchs. These included the Imperial German, Spanish, Italian, Danish and British armies. Remember that Zar Nicolas II was the last Zar, the one during WW1. So in the "war of all wars", he still held honorary ranks in armies which he was fighting against. You explain this to me, and i can easily answer how you can roleplay somebody who holds rank in both superpowers.

Did the Zar get those ranks before war started?

 

[Shinji Ikari]

Also, the empire was in essence a group from the federation that exiled themselves, in a RL analogy, that'd be kind of Taiwan vs China without the dispute over who is China.

 

[Sylow]

Did the Zar get those ranks before war started?

In the given example: yes. I have picked this example due to it being "most obvious" to people. There are more complicated examples to be found in history. History has a number of nobles in Europe from medeival times to the the 16th and 17th century, who held property in several nations and gained rank there. In case of doubt, study the history of the House of Habsburg. (And don't just focus on the family tree.... although one shall also note that a circle is not a healthy family tree... )

What you actually can look at is the whole rise of some people there. The whole political landscape often was one years enemy was the next years ally. And noblemen just made their way and career in between those permanently shifting alliances. And hey, that's kind of what we also have in ED. Unknown to many players here, the world of ED is not in an all-out war between the Empire and the Federation. They actually, at the moment, are even allies against Thargoids. But even without Thargoids in focus, they are at peace. There's one or another placeholder war here and there, but officially they are at peace.

The situation is not that far off from older times. And thus the whole idea of having -honorary- ranks (yea, this also seems to be a concept which was very common in old times, but seems to be too complicated to understand for present day people) with several rivaling groups is quite fitting.