Then the territory that overlaps is contested. Duh.
Anyways, you're thinking too much of borders in the conventional sense. This is a space game, and the time for travel makes anything beyond the immediate space around your planets contestable by others.
Are you currently allied to me? If so take a look at where I am fighting Flyingmana. As well as fighting along our borders I have sent out sizeable fleets to far off outpost and even core area's that I'm not close to. It takes time but if you plan it right its still entirely possible to contest far off holdings. If anything the time helps me, since I doubt he was expecting several 200 destroyer fleets to appear on those particular borders.
Of course they can just rely on the 1 scout defence, but as Flyingmana is finding out, if your enemy uses that tactic, you simply CAN'T contest any of their planets distance becomes irrelevant.
