This occurs after Wrex has taken over but before Vox has betrayed him, he's been allowing Muts into the library despite it freaking everyone out.
Frux and Muts are in the library, they getting into an argument which turns into a friendly wrestling match, the pair is rolling around on the floor with Frux usually pinning Muts despite his bigger size. From the second floor of the library Wrex and Fecs watch silently, Wrex is sitting on the railing while Fecs stands over him.
Fecs: Did you ever think you'd see such a sight?
Wrex: Not in a long time...
There's an uncomfortable silence between the pair, Wrex knows Fecs doesn't approve of him bringing a wolf out in semi-public.
Wrex: I suppose at this point you'll tell me I'm making a mistake?
Fecs (sighing and taking a seat): It's a little late for that. About thirty years too late for the rabbits. To think we've been reduced to this...
Wrex: We're still alive, Fecs.
Fecs (turning to him): For how long?
There's another moment of silence as the question lingers.
Fecs (solemnly): You're making a mistake. It's a mistake bringing him up here. It's a mistake thinking you're in control, of him, of the warren, of our future. You were never in control. How much longer do you think this charade can last?
Wrex: Well, three decades is...a long time.
Fecs (caught off-guard, conceding the point): Yes it is...
They both continue watching the cubs wrestling below.
Fecs: How much longer are you planning to parade him around like this?
Wrex: Once we open the gate to Marathon, he will have served his purpose, we can throw him to the wolves. He doesn't deserve to live like this...
Fecs: Are you sure he deserves to live at all?
Wrex (turning to him): That boy is our only bargaining chip with Weston.
This dialogue sucks, but basically Fecs says that 'boy' is responsible for more dead rabbits than their worst serial killers...or something. Anyway Fecs comes up with a number, saying "he kept count" (of all the rabbits fed to Muts to keep him alive) and holds the number over Wrex's head.
Near the end of this conversation we see Fecs imply that Wrex is using Muts as a surrogate for his dead son (which he is, even if Wrex doesn't admit it to himself) and that it's 'sick' and 'evil' what Wrex is doing. Wrex is clearly angry with the accusation and replies that he intends to do a lot more evil before they leave this place.
We could make this scene work if we re-work the dialogue, at the end of their conversation Muts accidentally scratches Frux's face, abruptly ending the fight. Muts feels horrible about but as Frux puts a paw to her eye she says it's okay, she's fine and it was just an accident. But we show Muts lingering on the trickle of blood, and he finds himself sniffing and getting closer to it before Wrex interrupts from above and says he needs to talk to Muts about something.