Isnt that stupid?
What game design decision justifies this?
Probably wasn't a "decision". They just didn't that the player would want to break the ceasefire until it was too late in the design stage to make a new UI for interacting with the pirates and militia. Then they were stuck with it.
Really the only practical issue is if you want to colonize the pirate base, or use the pirates guarding it to level up your titan. It's a bigger problem if you have a custom map or mod that uses militia controlled colonies. I had to redesign Truce Amongst Rogues completely in my Enhanced 4X mod to avoid this. You no longer get cease fires with them, but you get the ability to capture most militias with colony ships, and while the pirates will still attack you (and you them), they tend to go easier on you.