Like the title states, does a ship still engage when it is in Reserve? Nothing in the rules seems to say that it does NOT engage... though, I imagine that it's really a moot point, because while it would need to engage, it couldn't do anything during that engagement. Since all "abilities of a ship in reserve are inactive unless" explicitly stated otherwise, and any cards on a ship are considered to be abilities of that ship (including damage cards), not even Console Fire would be able to trigger...
Any thoughts?