To quote you, this is bluntly nonsense. No one in the world has the perfect, encyclopedic understanding of the rules they live by that are provided by the game book the players at the table read. Especially if we're talking about a faux-medieval world like the ones presented in most fantasy games. The people in the world would know basic stuff, sure. But they would know nothing about the game's mechanics.
Let me present a simple case.
I'm a moderately armored warrior, of above average strength.
How far can I jump?
If you wish to tell me I should have no real idea, then we might as well drop this right now, because I consider that patentetly ridiculous. This is a character who has been dependent on his understanding of his physical abilities for his whole professional life (which presumably didn't start yesterday).
So. does he know? If the player has to ask the GM every time, I'll state I don't think, in practice, he does in any way that matters; if he does (even with some degree of uncertainty, though most of that is why there's a die roll involved in most such things)
that's knowing the mechanics.
Similarly, a mage should have pretty good idea how far he can throw his lightning bolt. Again, mechanics.
A character would know they're hurt, they might know they feel like they're dying...but they wouldn't know what hit points are and they certainly wouldn't be able to make tactical decisions based on that knowledge. Your character won't know the details of a spell and how it works, for example, unless they learned that spell or happened to have studied about it (arcana check). They wouldn't know if a wizard lock worked on a daemon, for example...unless the wizard who taught it to them knew that, etc.
The problem is that with the examples presented earlier, they won't know that even if they have the spell. Its not in the spell description, so how could they? The player only has the data he's been presented.
Again, you can have the GM answer the question every time, but that gets back to "Is the GM going to be consistent about this with the number of spells even a couple of medium level spellcasters will know in D&D, given the lack of common metrics?" I've expressed my opinion on that.
Like I said, players don't need to know the rules. If the player alters their decisions for their character based on the rules of the game, that's proof they shouldn't know the rules. Play your character as if they're a living person in this world. People behave and act quite differently than the player characters.
No, to me that's proof the GM wants to play bait-and-switch on their understanding of how their world works. I may not know everything about every element of my world, but I can promise you I know good and well the likely range of outcomes of anything relating to my fields of professional expertise, and I wasn't trained in fields that would get me and others killed if I didn't.
That's arguing until you win because you know you're right so screw the game and everyone else at the table...I'm right dammit...territory. I will argue until I feel like not arguing any more. Jesus. That's legit someone with the argumentative flaw. What kind of nasty trolls have you played with?
Its arguing because you think it really matters and not understanding it is having you make decisions in the dark. That's not being a nasty troll, that's disagreeing with a GM's assessment of how important it is. And often they're not the only people at the table who think its important (though that can be if its in an area that doesn't apply to them).
That's odd to me as it's a fairly common practice in a lot of ultra-light play. Default to the GM, but if someone digs in, roll off. Because the game is the thing. Actually playing. Not sitting around arguing about playing. Again, unless the GM's call is going to kill your character and you don't agree with that outcome, most arguments are pointless nonsense. Unless it comes up in play, it doesn't matter. And we don't need to have rules that cover everything or worry about every situation a spell could possibly be used in up front. What a nightmare.
I've seen RNR married to an awful lot of pretty top down views of how the game is to be run. If you haven't, you've been fortunate.
And it doesn't have to be a decision that's immediately lethal for the character. How about it changing the situation as the player understands it so the planning he's been doing makes no sense? That can lead to failure or worse down the line even if it isn't immediately lethal, and not just for their character.
For some people, maybe. Others loved it and never stopped using it.
So? Some people like all kinds of things. Doesn't mean they're generically a good idea.