The very early decision of your approach to the conflict — indirect (Water) or direct (Steel) — feels somewhat pointless as well.

I don’t know the game, but I can guess at some ways you can use this to manipulate stuff. All about posturing in the fiction–if you call someone out (a direct conflict), they can’t really respond indirectly, they have to meet you where you’re at. Conversely, if you’re being sneaky and covert about something (an indirect conflict), they don’t have one direct target to strike at, so they have to respond indirectly as well.

Not as sure how you could frame a situation so that direct action requires indirect response, but I think there might be ways, given the context (maybe it’s a direct action that can’t be appropriately responded to in a direct manner because of social stuff or whatever, so they have to respond indirectly).