Or does this only apply when fighting other gangs?
It only applies when "in battle"... which is not mechanical, it's a situation determined by the fiction in play, so it can be very fuzzy.
That said, I'd say, in most cases, a one-on-one combat is
not a "battle".
It's kinda like obscenity... you'll know it when you see it! *laugh*
Here's another thread on it:
NTBFW