I might be over thinking this, just learning the game.
Engaged: 2+ Friendly or Enemy occupied cards are under VOF markers.
So if 1 friendly card and 1 enemy card have VOF markers the Activity Level would NOT be Engaged but Contact
I would say engaged as any 2 occupied cards have VoF is engaged, it does not say friendly and enemy . Nor does it say 2 of either friendly or enemy.