Mixed bag of many questions after first BWG play.

Here we have a difference of opinion. The flurry of combat, I agree, is the actual exchange but the exchange, as I read it, can be viewed in two ways: 1) an arbitrary time keeping/organization device and/or 2) the number of actions/reactions that can be planned for in a fight before someone is dead or you need to get out of grips and take stock of the situation (briefly getting out of range, circling and eyeing up the opponent, what have you). In either case, changing your weapon is an action that distinctly lowers your guard and gives the opponent an advantage in timing to get into an advantageous position - unless the two combatants (and I say this without sarcasm because it could happen) have agreed to time outs during the fight.

Yeah, sure, unless we assume that the penalty is because you changed weapon, having already positioned and scripted with another. If you have held a swordsman at bay with your spear for an exchange and then position with your fist, you could argue that you should retain the bonus to your positioning test (now using shortest), since you hold the advantage, and are doing so on your terms…
You could argue it either way I guess…