Actually, thinking about it further. You COULD consider the DM's declaration of actions on behalf of the NPCs to be environment description, which would place it inside of the play loop.
Only, the way I read it, it's not, since:
- The play loop only speaks about the environment, the players describing their actions, and the narration of the adventurers' actions.
- So it's only about the adventurer's actions, whereas the section that just follows says "In certain situations, particularly combat, the action is more structured and the players (and DM) do take turns choosing and resolving actions."
- This clearly means that there are situations where the DM takes his turn(s) choosing and resolving actions, which are obviously the ones of his NPCs/Monsters, since the example is about combat.
- Furthermore, the next sentence clarifies it even further: "But most of the time, play is fluid and flexible, adapting to the circumstances of the adventure."
- Which, in turn means that it is less structured than combat (where it is sequenced by turns), but also clearly means that the DM also chooses his actions, and this is not what is described in the play loop, as this one is (as seen above) limited to the adventurers' actions.
That being said, I think I perfectly understand
@Swarmkeeper's position, and I agree that it makes a lot of sense in common adventuring environment where the PCs "have the initiative", not in the combat sense, but in the sense of them deciding what to do and where to go, and it makes sense as a description for a beginning DM.
It's also extremely player-centric, which is both a good and a bad thing, a good thing because the PCs should really be the heroes of their own story, but to me also a bad thing because I like my adventuring worlds to be more alive with NPCs than them just being "the environment".
Which is why I defend the position that the DM is also very much an actor in the play, and for me it's clearly supported even by the description in the PH, which is obviously player-centric since it's the introduction to the PH.
Which becomes a play loop within a play loop since we need to accommodate a player who wants their PC to take a reaction. The NPC/monster action becomes both step 2 with a DM taking on the "player" role as well as step 1 description of the "environment" (from the perspective of the player). Play loop inception? Play loop nesting dolls?
I don't think it's that complicated, and I think that in common adventuring situations, the play loop is clearly the way to go in particular for the exploration pillar, however, for combat, there is a different play loop, since everyone including the DM, is taking turns choosing actions, and when we get into more complex situations (I'm in particular thinking social pillar as an example, but not only), exactly as written in the PH, "most of the time, play is fluid and flexible, adapting to the circumstances of the adventure."
The play loop is a nice tool for the beginning DM or for the DM who wants absolute player-centricity, my only point is that the rules - totally rightly IMHO - already point out that it's not mandatory, as "play is fluid and flexible".
To rebound on a number of my discussions with
@Maxperson, it's also a question of DM's style, maybe something to link to the "Sandbox <=> Linear Adventure" scale.
As for me, the NPCs are, even more than any element of the game world, what I enjoy as a DM, and even in a very sandboxy adventure, I have extremely strong and well defined NPCs, with their own goals, actions and intrigues. Of course, these adapt themselves somewhat to the actions of the PCs, but the other way around happens as well fairly frequently.
Are we good ?
