I just picked up the Battle of Hoth force pack, and looking at the AT-AT, I got kinda confused. The reaction is a great ability for sure, but why even have combat icons listed if they don't matter in an engagement because as soon as they are focused to strike, they instead take out an enhancement? Or is that optional and you can attack with the combat icons normally if you choose?

A Reaction is always optionnel, as long as it is not a Forced Reaction

Caal-FR is correct. Any gametext associated with a action (Action, Reaction, Interrupt) that does not have the word Forced in front of it is not required.

Ok, thank you guys for the clarification.

So can you strike with the reaction ability AND the combat icons? Or is it just one or the other?

It is one or the other.

Reaction: After this unit is focused to strike, instead of resolving its combat icons, discard a target non-limited enhancement from play.

Note the word instead.