I think you summarize it well here. The key thing here is the phrase "when violence is on the table". The point of the rule is that when violence is on the table, you basically can't talk your way out of a bind, as your opponent retains the ability to escalate to use force against you. That doesn't mean that Manipulation is useless, as there are many situations where violence is not on the table. Whether violence is on the table or not depends on the situation, and the GM has final say. In the example above, the GM would make a judgement call on whether is makes sense for the shopkeeper to resort to violence against the PCs. I would say, most likely not.Well, thank you for taking the time to explain. It still doesn't completely click for me, I'm not sure it ever will.
Let's break down the "shady shopkeeper with guards" case.
Failure: The shopkeeper refuses to sell. The PCs may either leave or fight.
Success: The shopkeeper agrees to sell OR The shopkeeper refuses to sell and the guards kick the PCs' ass.
Conclusion: The roll determines how nice the GM is allowed to be. In case of failure, the GM may not be nice with the players. In case of success, the GM may either be nice with the players, or be really antagonistic and trigger an outcome that is worse than failure (since in case of failure the PCs at least have the choice to keep the status quo).
Do I understand it correctly that, when violence is on the table, manipulation actually has nothing to do with player agency but is just a way to constrain the GM's choices? On a success the GM can arbitrarily be "nice" or "bad" but on a failure the GM may not be "nice". In other words, a failure preserves the status quo, a success forces an outcome to happen but the GM decides if that outcome is good or bad.
When violence is not on the table, it's of course much easier.
The point of the rule above is that we want to avoid a system where you could get out of basically any tight spot by rolling a good Manipulation roll. That can be perfectly fine in some games, but things don't come that easy in the Forbidden Lands.