that's more than just thinking about attacking. That's an action declaration to attack. At that point in the fiction the character is attacking the merchant. Initiative is then rolled at the table as part of resolving that action declaration.
I think [MENTION=23751]Maxperson[/MENTION] is from the school of thought that player action declarations don't in themselves change the fiction until they're mediated through whatever resolution process the GM calls for. As you note, this creates "mind reading" puzzles in some contexts, and [MENTION=23751]Maxperson[/MENTION]'s response is that something happened in the fiction ("A body language shift and/or he's reaching for his sword") which is physical enough to perceptibly manifest an intention but muted enough to not violate the basic principle of this school of thought.
The strongest proponent of this school of thought on these boards is Saelorn (I can't mention him because he has me blocked), but it's one I've seen advocated by other posters quite frequently. It is typically connected to other views about the roles of GM vs players in establishing the content of the shared fiction. In its strongest form, a player action declaration is best understood as a
suggestion to the GM that the GM incorporate the occurrence of a certain event into the shared fiction.
You’re still mixing things up. Initiative is rolled at the table. Attacks happen in the fiction. You’re using the order of mechanical resolution to make an argument about the chronology of events in the fiction, which is like comparing apples to oranges. Initiative doesn’t relate to a discrete fictional event the way an attack roll does. What it represents in the fiction is a continuous effort to move and act quickly that lasts throughout the entire combat encounter.
This reminded me of the following
comments by Ron Edwards:
The causal sequence of task resolution in Simulationist play must be linear in time. He swings: on target or not? The other guy dodges or parries: well or badly? The weapon contacts the unit of armor + body: how hard? The armor stops some of it: how much? The remaining impact hits tissue: how deeply? With what psychological (stunning, pain) effects? With what continuing effects? All of this is settled in order, on this guy's "go," and the next guy's "go" is simply waiting its turn, in time.
The few exceptions have always been accompanied by explanatory text, sometimes apologetic and sometimes blase. A good example is classic hit location, in which the characters first roll to-hit and to-parry, then hit location for anywhere on the body (RuneQuest, GURPS). Cognitively, to the Simulationist player, this requires a replay of the character's intent and action that is nearly intolerable. It often breaks down in play, either switching entirely to called shots and abandoning the location roll, or waiting on the parry roll until the hit location is known. Another good example is rolling for initiative, which has generated hours of painful argument about what in the world it represents in-game, at the moment of the roll relative to in-game time.
When I first read this I was in my fifteenth year, or thereabouts, of GMing Rolemaster, and thus intimately familiar and imbued with the requisite simulationist sensibilities. It explained why, of all the optional/supplementary systems found in the seven volumes of Rolemaster Companions,
initiative was the one that got the most attention and had the most variations, all trying to cope with this question about what it represents.
I haven't played RM for about 10 years now, but I currently play and GM another system which - in its core resolution mechanics - has very similar simulationist leanings, namely, Burning Wheel. And interestingly it doesn't have an initiative system at all! - it relies on (a moderately complex system of) blind scripting and simultaneous declaration and resolution.
Classic Traveller - another ultra-sim system that I am currently GMing - has no initiative either but rather simultaneous resolution. (It's not clear whether declarations are meant to be blind or not, but combat hasn't been a big enough part of our Traveller game for this to really need deciding in any non-ad hoc way.)
(Also, for completeness: Traveller has parry rules but no hit location so the other problem Edwards notes doesn't come up; RM has parrying which factors into (among other things) determining critical severity; and the crit roll determines both hit location and the bulk of the damage; so I think there is less dissonance in this respect than RQ; but the bump in the rug for RM is that it has a lot of trouble with piecemeal armour whereas RQ handles that very elegantly.)