Frequency of

I am playing a new version 1.02 game and I set "Hostile Entities" to "Rare".  However, in my home sector, I have already destroyed a Space Monster nest and a base of whatever those red things are called and now I have stumbled across a spot that has both of them (see the second screen snapshot below).  That means that my home sector has at least 4 Hostile Entity nests/bases.

I think your logic for the frequency and location of Hostile Entities needs some work.