Suppose that the GM had decided that open outreached hands are taken as an insult by hobgoblins, and so had applied a penalty to the roll. I think that would be pretty outrageous!
I wouldn't find that outrageous at all. To me that would be the GM spontaneously adding some color on cultural variations, in a kind of funny way. As a player I would assume that, if the GM had invented that spontaneously, it was for a good reason.
I do recognize that some GMs abuse that kind of authority, and use it to become adversarial with the players. My solution to that is to not play with those GMs.
Whereas suppose the GM had introduced that fiction to explain the poor reaction result,
I'll interrupt here to say that I'm
also a huge fan of doing this sort of thing post-roll, and encourage players to do the same. "I failed because..."
then that would be integrating the unfolding fiction, plus the result of the roll, in a way that produces something interesting, has the sort of surprise you talked about (albeit for a gesture rather than an item, but hopefully you can see the point nevertheless), but doesn't involve the GM just springing a hosing on the players.
The more general point is this, I think: declaring actions for their character is the most common and important sort of "move" that players make when playing a RPG. Having the GM just decide that things fail will tend to be a let down, or even experienced as adversarial. Whereas in a game that uses luck (ie dice rolls) to help determine whether moves succeed or fail, losing because you rolled badly is part of the game.
I haven't quite thought through how this would work in the context of a magic item - the obvious way would be for use of the item to require a roll, and then to build up the fiction around failed rolls, but that may not work for D&D.
Still, I hope you can see what I'm getting at, in contrasting play of the game with storytelling.
Oh, I totally see the contrast between 'play of the game' and 'storytelling', but I just don't care as much about the distinction. I don't want a game that is ALL storytelling, but I'm flexible on where the boundary appears.
For example, I think you would agree that the GM is free to decide how many hobgoblins are in the band, and what kind of mood they are in already, without following "rules" to determine those things. I think you are suggesting that proper boundary is between "the setting" and "results of player actions". Is that correct? If so, I do see how that's a convenient (maybe the only?) place where the boundary can be precisely defined. So if one has a preference to limit "storytelling instead of rules" that's a good place to draw the line.
I am just not as personally vested in that distinction. I don't mind GMs making executive decisions if they (in their...cough...infinite wisdom) think it results in more fun and better story.
For me the important boundary...and you and I have talked about this as well...is that my character's thoughts and
attempted actions are mine and mine alone, and the GM is limited to determining, using whatever method he/she chooses, whether they succeed or fail. As long as I am free to smile at the hobgoblins and hold out my hands, without the GM saying, "Your character wouldn't do that..." then I'm good. Any exceptions to the contrary is where I expect there to be explicit rules, such as mind-control spells, pre-determined monster abilities, etc.