Ah thanks, wow! This is very useful. I didn't want to make the opening post huge, but maybe should have noted that I did make some adjustments to the scenario, and that the players were unexperienced in RP. So I kind of felt that they were trying out different playstyles, where they started like I had intended but in their experimenting kind of deviated.
I supposed I forgot some rules in the heat of play, like the crossing swords one. Rewinding also sounds super useful (I used it a fair bit, but this extent of giving alternatives sounds rad, esp. for less experienced parties).
These tips are great! I'm thinking about trying this with more hardcore P&P RPG'ers, so I thought I'd post these questions beforehand. ;)
(and yeah, for some intents I think using Mutagen or core Goblinville would be better suited, but I just really love the tone and setting of Picaresque, and thought the mechanics added to it wonderfully, with the titles and Shame and everything. So thanks!)