If you play with this variation then players do not choose the difficulty of an Exploration Encounter. The difficulty (whether you do the Easy or the Hard Encounter) is determined on whether you are exploring a "Safe" sector or not.
When you explore a new sector, then it is considered "Safe" only if there is NO enemy present in any of the adjacent sectors.
This variation add an extra layer of complexity in the area control of the game. It is advised that you use it after you have mastered the core rules.