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The LFL can only be obtained via plot or start conditions. Its It's a player only tool, thus stored in the player inventory in the pilot info menu, and cannot be sold or upgraded.
While on activated, it will only show the UI if there is something discoverable in range, but it can be manually turned off.
The LFL will pick anything sector wide, then at 20km will show the middle level as filled and at 5km it will fill the top level. Once closer then than 1500m, the discovery triggers and the object is considered discovered. Discovery points are then rewarded and added to the total and current pool.