At the start of combat, after any Ambush or Surprise is resolved, each player independently chooses their initiative slot for the encounter:
This choice is locked in for the rest of the encounter. On Round 2 and beyond, all players use their standard actions regardless of their choice; the Round 1 Extra Action from Hold Back does not carry forward.
Why lock-in? If players could switch from Hold Back to Strike First between rounds, they could chain actions back-to-back across the round boundary, acting late in one round, then early in the next, before NPCs get a turn. The game is deadly enough without that.
Each round, turns resolve in this order:
Scouts are unaffected by the Strike First / Hold Back choice; they always act first as part of the existing scout mechanic.
Within each player group (Strike First and Hold Back), players decide their own turn order. This can change from round to round; coordinate with your squad.
If one group is Ambushing, possibly with Surprise, the ambushing group acts first. After the ambush round, players make their Strike First / Hold Back choice for subsequent rounds.
Scout Fails to Detect Ambush Group.
Ambushing Group, Player Scout (if still alive), Player Group (if they are aware of the skirmish).
Scout Detects Ambush Group.
Player Scout, Ambushing Group, Player Group (if they are alerted by the scout).
A hero who surprises their opponent catches them Off Guard and acts first in the round (if initiative hasn’t already been determined). Attacks from behind, an Ambush, or unexpected sources (such as a companion) make up the most common sources of surprise. How much Off Guard they are depends on the Success Check.
While the target is unaware of you, you are Ambushing it; your attacks and defence against that target are made with Advantage. If you struck from a hidden position you are also Concealed, and the two stack to Advantage-3. The Ambushing advantage ends once the target is aware of you, unless you remain Concealed.