Orange Squares are places on Map Tiles where Hazard tokens are placed during Mission setup. After that, the Orange Square itself has no special game effect, but the Hazard token does, as long as it's there.
Hazard
Hazards are obstacles on the Mission Map. During Mission Setup, Hazard tokens should be placed on all Hazard Squares on Map Tiles, meaning Squares that a highlighted in orange and has a flame icon on them.
Hazards can be destroyed by making an Attack against them; both Melee and Shoot attacks are possible. The Hazard is destroyed if two or more damage are inflicted on it in a single attack, or if receives a critical hit.
When a Hazard is destroyed, the Hazard token is removed from the Mission Map, and a Hazard card is drawn to determine what happens.
Question about Hazards and cover
In Kickstarter update 84, an FAQ said: "Q: Hazard Squares: Do these block Movement or LOS (while still in play)?" and answered "A: No, the hazards are usually chest-high objects so it can be shot over or easily traversed." -- BUT: in the rulebook, page 24, it says "But with risk comes reward as these same Hazards could provide cover from an attacking foe." -- SO: how can the Hazards provide cover if they don't block Line of Sight? Do Hazard tokens work as Red Squares?
It wasn't clear how this would work, so I posted a question to Archon in the Kickstarter comment forum, and got the following answer:
on july 28, 2022, Archon Studio wrote: "The section HAZARDS of the rulebook says "But with risk comes reward as these same Hazards could provide cover from an attacking foe", some hazards provide cover by giving +1 Defence but only on GREEN SQUARES adjacent to them. On page 11 in the Rulebook, there is Example 1 with tile where are hazards and green squares that provide cover.So it seems the Hazards themselves don't provide cover, but some of the spaces where Hazards are spawned have cover-providing Green Squares adjacent to them, independent of whether the Hazard is still there or has been destroyed.