Just to be clear that we're all on the same page here, I want to give an example that I believe illustrates your points 1 to 3:
[initiative]The initiative order is P1, N1, P2 - where the Ps are PCs and N is a NPC/creature.
P1 moves, then attacks N1. N1 survives the attack but triggers an ability that depends on being attacked/taking damage (eg in 4e, this might be a buff that is triggered when N1 is bloodied; it could be some form of rage; etc).
N1 attacks P1 with multiple, sequential attacks (eg multiple attacks with the same weapon/limb/whatever) that benefit from the triggered ability. The last of these renders P1 unconscious.
P2 casts a spell (eg Healing Word) to stabilise/revive P1, and then moves to stand over P1's prone form in order to defend P1 from N1.[/initiative]
This only makes sense if P1 first moves then fights N1 - triggering N1's special ability; and then N1, buffed by that ability, hits P1 and knocks them unconscious; and then P2 casts the spell that revives P1 before moving to where P1 has fallen.
Which means that the fiction of the combat is turn-based (your 2(b)) - which is weird at best!
P1 moves marginally quicker than
N1, attacking them in the square that just-sufficiently-accurately represents their position.
N1, acting just-sufficiently-slower than
P1 that they will count as having taken damage, triggers their buff. The two are dueling, and the game mechanics represent the palpable hits, fatigue, sweat blurring eyes, luck running out, that come out of that exchange. Mostly likely, players and DM only narrate the highlights. N1 was bloodied somewhere in their rapid exchange of blows, so that they could benefit from the condition to land some hits that counted.
P2, conscious of their ability to heal quickly and from range, has acted just-sufficiently-after the others that it makes sense they can cast their spell to help
P1. Perhaps the group envisions P2 having an ongoing awareness of their allies so that indeed their decision can and will be triggered by events. P1 collapses and P2's heal lands as they hit the floor, prone but thankfully coming conscious.
An alternative to consider is what narrative emerged if P2 rolled a higher initiative than P1, and didn't ready to cast
healing word?
1. There inevitably arise situations with D&D combat such that the fiction established the previous round changes mid round and players base decisions off these changes. I think this is uncontroversial.
For me the question isn't whether it is uncontroversial, but whether you find that aspects of the game structure fail to support the kind of narratives you want to create. I can appreciate the problem you describe, but you'll have to take me on good faith when I say that it really doesn't arise at my table. We don't lose suspension of disbelief just because the game structure is turn-based. I'd say that large HP pools and
whack-a-mole healing are what do our SoD the most harm, and those will remain even if it takes until the round following to cast the heal.
2. The existence of such decision points establishes either a) that D&D combat fiction is actually turn based (and there's a more in depth discussion we could have about how this ends up being fictionless as well) or b) the character and these decision points aren't based on any established fiction.
When we know the colour of an object at the edge of our vision, that isn't based on any actually perceived colour: we let our brains gloss over it. Another poster pointed out that in books we read words somewhat sequentially (cognitively, the scanning of words isn't a clean linear progression across the visible text), but from those static symbols we can accept into our imagination simultaneous events.
By analogy, I feel the issue is what we are able to gloss over. It's worth calling out lack of simultaneity as a thorn for your narrative. I just don't feel that what narrative is, can be limited as you describe. Games are systems of symbols, symbolic relationships, and dynamics. Our brains happily parse symbols and imagine what they represent. All we need do is change our mechanics
just enough to dispel our SoD-break, and narrative will reform.
3. It's not actually possible to play a combat without such decision points arising, even if our brain processes a solid answer faster in most situations than we realize (best option here is to attack, dash, disengage, cast healing word, etc) which almost makes it seem as if there was no decision point at all.
The seeming is the same as the being, in this case. Or to put it another way, imagine that it
seemed for you that a plausible narrative emerged from the combat mechanics. How would you tell the difference between that, and a plausible narrative?