However on reading Status Quo (which is described as The Dark Wheel for Oolite) I discovered that the author lent heavily on technology and background from Frontier and FFE, such as the presence of the Empire and Federation political bodies and ships such as the Imperial Courier and Eagle Mk2 Fighter. This led me to ask the question of what should be considered canon for Oolite? If Status Quo is accepted as the base novella for the game then that would suggest the Empire and Federation, as well as other Frontier history, should be included as canonical.
Drew has based his work on Selezen's timeline, which exists mostly for the purpose of reconciling the discrepancies between Elite and the Frontier-verse. So indeed, for anything based on the timeline Frontier is in pretty much by design.
That's also my personal take on Ooniverse history, mainly because I like the bigger background it provides, and the dramatic idea that everything we see in Oolite is doomed a mere 20 years from the start of the game. I have never played any Frontier game myself and therefore don't particularly care about their content or their canonicity, though.
There are forum denizens who are fiercely opposed to including Frontier in the canon, but still enjoy the Oolite Saga on its own merits.
The bottom line and most important statement about Oolite canon is still that there is none. Canon is what each player decides to be their canon. For Elite it was always true that the most important part of game play did not take place on your screen, but inside your head. You had to fill in the blanks provided by the game (beginning with what your ship looks like inside and out, other than just a wireframe; going on with what motivates other space farers, and not ending with what GalCop is all about). Personally, I bought my first copy of Elite in some "Gold Collection" in 1985, and never knew about The Dark Wheel
until discovering Oolite in 2005. Therefore in my head the Ooniverse probably looks different than in other people's heads.
So you are absolutely free to include Frontier in your interpretation of the Ooniverse, and you are also absolutely free to refrain from doing so. If you're writing an OXP, people will play it regardless of their own personal stand, if it's enjoyable to play. If you're writing fiction, people will read it regardless of their own personal stand, if it's enjoyable to read. So whatever you do, let your first goal be enjoyability, not canonicity. That's the best advice I can give.