Okay, let's say i'm not completely right there, how does that impact the conversation on diegetic vs non-diegetic mechanics?
Just that I don't know if it's always easy to agree exactly on what may be diegetic or nondiegetic.
What you mean here by 'in play' is a bit confusing. Do you mean during 'the action'? Because most games handle character inventory management 'during play'.
Typically for me... and I don't think I'm unique here, though I expect plenty of others handle things differently... except for specific items, in D&D and similar games, I basically do my inventory at the very start of play, and then it barely ever comes up again. Obviously, I might gain a +2 sword and swap it for my +1 sword, and I'll accumulate other magic items or consumables. But aside from that, there's gonna be the backpack, the adventurer's or explorer's pack, and little else. I've yet to have a PC in 5e ever become encumbered.
With Blades, loadout is much more meaningful. It comes up in every session. Players need to declare the size of the load... light, normal, and heavy. This is a meaningful choice which determines the number of inventory slots that they have available, and also how they appear, and likely impact on relevant moves. So if you've selected a Heavy Load, you have 6 inventory spots, and you are visibly geared up, so taking an action that requires speed or convincing someone you're going somewhere for perfectly normal purposes may be more difficult.
All this to say that the "whole point of such an inventory system is so that the player doesn't have to engage with it in the game world" is misplaced. It works differently than more traditional approaches, but it's far more involved, far more integral to play. A player must actively engage with it routinely in meaningful ways.
But here's the crux - The player's decision point for item selection is not-diegetic simply because Loadout is part of the game world.
How is it not? If it's part of the game world, then it's diegetic by definition.
If a player offers you a Devil's Bargain to sacrifice an item for a bonus die, isn't sacrificing that item something that's happening in the game world?
We can also frame 5e inspiration similarly - if a player uses inspiration to give advantage on a saving throw to avoid a Dragon's fear effect, isn't the Dragon's fear effect something that exists in the game world?
Or to be more blunt - since these relate to things that exist in the game world - why are you calling them non-diegetic?
Because a Devil's Bargain need not be diegetic. It's possible it may, as in the example you provided, but it's just as likely that it won't.
The same for inspiration. It's a reward to the player for playing their character. Oh, you referenced your bond, here is inspiration! Then the player uses it for a skill check to open a lock. There's no connection among the things in play that are involved. We can't really explain what the inspiration is.
I'd say that if the flashback is when we learn of the events then the character doesn't experience the flashback. Instead the character experienced those events in linear, chronological time - but not the flashback itself.
I'd describe that by saying the events of the flashback are diegetic, the flashback itself is non-diegetic.
To tie this back to Loadout - I'd suggest the way Blades handles Loadout is itself a form of flashback. One could imagine a brief cutscene where it shows the character previously packing this gun for this score. That's essentially what's happening when a player declares a Loadout item in Blades.
I see what you're saying about the Flashback... but let me offer a comparison.
So a player makes an attack roll in 5e, and that represents the character making an attack in the game world.
The player makes a flashback in Blades, and that represents the character having made a preparation for this moment.
There's certainly a distinction, but I don't know if it's along the diegetic angle.
I was thinking the same. The temporal sequencing isn't really at issue. One could even say that we just chose to play events out of order.
That's exactly what's happening. The chronology is different, but otherwise the games play similarly.
Assuming that the stress expenditure has some in-fiction correlate, there is an interesting question - when is the stress deemed to have been suffered? At the time of flashing back? Or at the time flashed back to? I don't know BitD well enough to know the answer to this question.
Option (2): in the "past" of the fiction, ie when the events of the flashback occurred.
In the post I am about to quote, @hawkeyefan appeared to go with option (2), and indeed seems to deny that we need even suppose that the events of the flashback are recalled "now" by the character:
I don't think the book offers a definitive answer, but the way I think of it is that the character incurred the stress in the past, when they took the action depicted in the flashback.
I tend to think of this as the character recalling the events in the moment. Which is why I find it hard to make a distinction between this and Lore/Knowledge checks in a more traditional game.
