When you have a successful ambush, the victim has to make a Steel test.
Is this done before or after the scripting for the exchange is done?
Before!
Excellent. More generally, is it that you bring positioning into Fight, and wounds out? So a Steel test from outside wouldn’t be legit.
Sorry, I don’t quite understand your question.
Maybe an example would help?
The most straight-forward example would be someone ambushing someone else, probably using stealthy vs observation. If the ambusher wins, the loser makes a steal test. If the intent was to go into Fight, then the loser will hesitate some number of actions. So, if their reflexes is 4, and they hesitate for 4 actions that first exchange is going to go badly unless they choose Run Screaming.