IMO, it would make SO much more sense if it were during FS2's timeline. You have an existing hostile Terran faction to fight, and what's more a large land battle already mentioned - Cygnus Prime. There are capture missions you could do involving Terrans and all sorts of scenarios you could stage. Seeing as how it seems you're going to be using Terran actor models as the primary antagonists, using an existing Terran enemy would make far more sense.
FS1 on the other hand has only McCarthy as an existing Terran faction, which is tiny. With no mention of previous rebel Terran factions, you'll have to make your own Terran faction up which is going to sound like canon-rape. Apart from a possible Taranis boarding or recreation of Hallfight, I seriously doubt FS1 is a good place to set this mod.