In the artwork, it is using its Round Laser, which attacks enemies surrounding it from all directions at once.
The Jade Knight's impressive defense and ability to "avoid" traps is a reflection of its in game ability to cover all angles with its Round Laser. Its second effect to retrieve another ship (or another level 4 light machine) to your hand is most likely a reference to how the Jade Knight is extremely useful when playing 2 player mode.