Mueller. Set during "Missing in Action." Spoiler Alert!
It amuses Kat a little that she's slept with both Shelby and Lefler's husbands. It's not a fact to be proud of, of course, but at the same time, it's not something she's ashamed of, exactly. It is one hell of a conflict of interests, though, which is maybe why Elizabeth has Kat choose between Cwan and Mac. It makes sense in a weird way: Kat is equally beholden to both men, so of the three women, she would be the best person to decide between them.
Then again, perhaps not. This, too, could be the reasoning behind Elizabeth choosing Kat to decide, to be the King Solomon of the group. Elizabeth is perceptive, and it wouldn't surprise Kat if her former captain knew just how... beholden Kat was to Shelby's husband.
Kat knows that she's kind of obvious, sometimes. It's not one of her best traits.
But in the end, she picks Si Cwan. She picks Si Cwan because she knows Mac is smart and innovative and has a wife to come home to. Cwan is capable as well, but he worries about honor and valor and duty and cares very much about his fledgling republic. And as much as she hates to admit it, the stability of the sector depends on Si Cwan's government holding together.
Shelby is very quiet after Kat announces her decision, and though she assures Kat that she's not upset, she spends much of the voyage to Thallon staring out the window of the ready room, watching the stars pass by.