To respond to some of the above discussion:

The attributes mainly exist to color the narration of the action. Water vs Steel is both possible and pretty common. Let’s say, for example, Water vs Steel, Blood for Blood. Throwing out some possible outcomes here:

– Steel wins, perfect Duel: outright murder the other guy
– Steel wins, against two Allowances: provided both agree, murder the other guy, who rises up at the last moment to slit your throat as a final act
– Water wins, perfect Duel: At the last moment, step to the side, twist the wrist, and your opponent’s charge impales him on your waiting blade
– Water wins, against two Allowances: spin the opponent around, embrace him one last time, recognize his position as a former ally, then use your own blade to mutually impale yourselves together (see: Hero with Jet Li)

Similarly, for narrating actions, it’s all in the narration. Some potential:

(in the first stage)
– Steel Counter, in Range: Intimidating stares, proud shouting of one’s lineage, capable threats
– Water Counter, in Range: Silent nods, shifting of stance, twisting of countered threats, warnings of dire outcomes
– Steel Counter, out of Range: Personal insults, careless waving of swords, spitting
– Water Counter, out of Range: (this one’s tough) Evasive mockery, showings of flippant disdain, too-colorful taunting poetry, pleading for peace

(in the second and third stages)
– Steel Counter, in Range: Skip all the dancing and just go for expert strikes
– Water Counter, in Range: Feints and traps, leading the opponent into a perfect position to take advantage of their poor form
– Steel Counter, out of Range: The combatant is succumbing too deeply to rage, striking too wildly, losing form, and embarrassing himself in the process.
– Water Counter, out of Range: The combatant avoids too much and by doing so without committing to action, he shows himself engaging in cowardly tactics