Ovinomancer
No flips for you!
This isn't any different from a number of other approaches that don't claim to create a "living world." It is, in fact, a common theme to all RPGs that feature a GM -- at some point, they use their judgement to make a decision. If this is the explanation, it holds little explanatory power.As the risk of being laconic: GM decides based on a number of factors (bias, tables, extrapolations...etc)