The USB_FAULT and USB_PSW pins are used to control the power level on USB_VBUS signal when Edison acts as Host device. So, the goal of these three signals is to provide power to the Slave device in a safe way.
In both expansion boards: Arduino and Breakout, USB_FAULT and USB_PSW pins are used together with the IC MIC2039 to control the USB_VBUS signal that will power the Slave device. I will recommend you to follow a similar design to make sure the Slave device will be powered with safety values.
But, if you are sure the Slave device is already powered with the battery you mentioned in a safe way, you can do the follow changes with the USB interface of Edison:
- USB_FAULT pin: This is an input pin and it is active low. If you won't use the protection circuit and the Slave device is powered by its battery, you should connect this pin to a pull-up resistor. Notice this is a 1.8V pin tolerant.
- USB_PSW pin: This is an output pin. It is used to enable/disable the IC MIC2039. Since you are not using this IC or a similar one, this pin can be left floating.
- USB_VBUS signal: You must notice that USB_VBUS signal is not the same as USB_VBUS pin. The “pin” refers to the pin of Edison Compute Module and it is used only when it is connected to a Host device (Edison acts as Slave device). The “signal” refers to the output of the IC MIC2039 that will power the Slave device when Edison acts as Host. In this case, the USB_VBUS pin is not being used. In your case, the USB_VBUS signal will be provided by the battery of the Slave device and the USB_VBUS pin of Edison can be left floating. However, I would suggest connecting it to a pull-down resistor.
Please let me know if this information has answered your question.