Starfleet was and is as militaristic as the plot requires it to be.
Exactly, and given this, we might interpret that this is
literally what happens within the fiction. Let's say it militarizes and demilitarizes as needed, assume that there are detailed regulations and procedures in place determining when and how this occurs (the complete details of which we'll likely never be
fully privy to), and call it a day on this one. Starfleet can be a continuation of NASA in the unprecedented time of peace on Earth in which it was initially conceived and birthed
and a fully-fledged spacegoing Navy of the Federation during the Dominion War; Kirk can be "a soldier, not a diplomat" when war with the Klingons is looming in "Errand Of Mercy" and "primarily an explorer" rather than a "military commander" after such tensions had died down by "Whom Gods Destroy"; there can be harmony between the stories that clearly portray SF as a military and those that explicitly claim it isn't one without there having to be agreement on the subject among their writers, and without us having to ignore any of them. And an endlessly recursive debate can end without either side having to be wrong!
["Peak Performance"] is often used in the "ain't a military" side of the argument, but it's right there, Starfleet orders Picard to do it, and Starfleet sends out a tactical expert to assist.
If Starfleet isn't a military, is Starfleet Command and the rest of the fleet aware of this? Or is it Picard in his little bubble again.
To be strictly accurate to the terms used in this episode, in this particular circumstance Starfleet "requested" the simulation and the
Enterprise's officers "decided" to "agree to" it. Not that I suggest they couldn't just as easily have been ordered to comply despite all "resistance" but in point of fact that's not what's said to have happened:
Kolrami: Captain Picard, it is my understanding that you initially resisted Starfleet's request for this simulation.
Picard: Yes.
Kolrami: May I know why?
Picard: Starfleet is not a military organization. Its purpose is exploration.
Kolrami: Then why am I here?
Picard: With the Borg threat, I decided that my officers and I needed to hone our tactical skills. In a crisis situation, it is prudent to have several options.
Riker: I prefer brains over brawn as well. I think it's a waste of effort to test our combat skills. It's a minor province in the makeup of a starship captain.
Kolrami: Your objection is noted. Let us hope your distaste for the exercise will not affect your strategic abilities.
Riker: Mister Kolrami, when I agree to do something. I do it.
I know, I know...po-
tay-to, po-
tah-to.
I'm not sure how much more effort I want to dedicate to rehashing points I already made so recently and at such length in
this thread, in which IIRC both you and the OP here also participated, but I guess I'll see how I feel tomorrow...suffice it to say for the moment that there's a
bit more to this than Picard being in his own "little bubble" of denial.