Government research labs have a budget for all types of blue sky research. You never know when something useful may appear; diamond in the rough. From a military POV, you practice all types of scenarios, just in case.
I think the main problem with cold fusion has been a misunderstanding with how it might work. How it is thought to work, will not work. But if you look at it differently, it has potential.
Here is my POV. If you look at an atom like oxygen, it has 8 protons and 8 electrons. Oxygen can exist as oxide or O-2, which has 8 protons and 10 electrons. The question is how can oxide be stable if there are two extra electrons compared to protons? The answer is, electrons orbital define the paths of electrons in motion. A moving charge, such as an electron, will create a magnetic field. The 10 electrons of oxide, move in such a way in 3-D, that they define enough magnetic attraction sufficient to overcome the added electron repulsion.
It follows logically, that the nucleus protons have something similar to the electron orbitals. If we had only static protons, the positive charges will repel adding strain to the nuclear binding forces. If we add motion to the protons; orbital shapes, the protein can generate magnetic attraction that can stabilize the nucleus.
Cold fusion is connected to using election orbitals; chemistry, to tweak nuclear orbitals; physics.
This possibility is based on the assumption that if both the electrons and protons had orbitals, these will interact to minimize the atomic potential. My guess is these will form mirror images. Like the concept of stereo isomers, they will look the same in a mirror, but they can never overlay. This keeps atoms from ever being able to collapse; superimpose.
The original experiments using hydrogen and platinum, was based on using hydrogen protons to add a third layer of orbitals; hydrogen, to the platinum nuclear and electron orbitals mirror images. This somehow tweak the nuclear bonding orbitals to a higher energy state triggering a reaction that has not be easy to reproduce.
The way I would do this is create an exotic oxidation state, like -6 induced into orbitals. The nucleus will try to reflect this being pulled into an excited state leading to fission. Ideally, if we could make stable products, we have clean fission.