Yes what most people said is true, let me summarize.
The whole conflict started when the BAF setup a technology exchange with the Liberty Navy.
Liberty Navy got a few templars/challengers plus Splitters and in return the BAF got Magma Hammers and a few Liberators (I think).
An operation was conducted and the KPT retrieved evidence of Primary LN members using Splitter guns. They forwarded it to the Emperor and the Emperor got all angry at the Libertonians.
This lead to the initial setup of the embargo you see today. However, what made it stay, to this day was primarily due to the LSF attempt of spying in the Kyushu System when the Emperor had a meeting with RM officials.
Now tensions have risen again due to the KPT have managed to gather intel of a possible attempt from the LSF to assist traders who are trying to break the embargo, as well as entering Kusari's side of the Kepler system. It's important to know that Kusari believes they control that area because the adjacent Trade-Lanes and Jumpgate to Shikoku belongs to the Naval Forces. Liberty disagrees and claims the system is independent system-wide. Currently, if Liberty Military/Law enforcement is found within that area, they will be told to leave, if they don't, most likely engagement will occur.
However, recent talks suggests this KPT operation might be short-lived and most likely aborted. We will see.
All in all, I believe these tensions arising and the consequent Role-Play to be very nicely played, with little to no "Player whining". People rolling with it. Corporations taking new stances. Striking new deals. I hope it has given them something more to do.