(I feel like the argument stemmed from Black Hat being meaner than usual towards Flug because he’s frustrated at himself trying to understand his affectionate feelings, and Flug finally blows up about it)
Lil Katie Holt knew she wouldn’t be allowed in the Garrison anymore after hacking their servers. So what did she do? She stopped being Katie Holt. Just like that. She probably hacked some shit, got a fake ID and probably a bunch of fake documents and just became Pidge Gunderson. And the new Pidge Gunderson went unnoticed and got into the Garrison as a space cadet like a badass undercover fucking spy.