To be clear, all three battles should be fought on the same map?
I really like the your direct/open challenge distinction, as that allows us to completely remove all randomization aspects from battle 3. If it is the first match between two players and it comes from a direct challenge, the challenger is the attacker in battles 1 and 3. If it is the first match between two players and it comes from an open challenge, the challenger is the defender in battles 1 and 3. Does that sound right?
I should probably also add in a rule that says the Gamemasters can modify the rules at any point, even while play is in progress, if it is felt necessary to preserve fair and honorable play.
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