This question is admittedly not TI4 related, as I don't see a change in the rules regarding it, but I was always unsure of it.

Rules says action cards played are in order of initiative. So space combat. I use sustain damage on a dreadnaught. Opponents plays direct hit, I play emergency repairs. I read rules as:

a) my initiative is 1, his is 2 - repaired, direct hit wasted (card discarded);

b) my initiative is 2, his is 1 - direct hit applies first (don't bother with the emergency repairs).

Is this how everyone else applies the rule? I.e. if a 2nd action card is played by a lower initiative player it takes affect first and effectively wastes the action card played?

Or do people actually go: you have the lower initiative is there an AC you'd like to play? No. Then I'll play mine. Or I am playing an action card is there something you'd like to play first?

That is a problem that's been around forever and I was hoping they'd have fixed it in this edition. So far, I haven't seen proof that it was. If I were writing the 4th edition rules, I might have written specific instances for playing cards right into the turn order (as part of each round of combat, etc).

I do believe there's a new rule that says that you must be able to resolve an action card fully in order to play it, so perhaps if you are beaten to the punch by somebody with a lower initiative, you simply can't play your card and get to keep it for another day.

I was really hoping they would tighten up things like action card play triggers and stuff if they ever came out with a new edition. I guess we'll find out soon enough...

If I recall correctly, initiative doesn't matter in this case since you start with the active player. Also, there is no Magic effect-stack. Each player has a window of opportunity to play cards, starting with the active player and each effect is immediately resolved. So if you play emergency repairs first, direct hit can not be played and remains in the owners hand and if you play direct hit first emergency repairs can not be used to counter it.

So if you are not the active player you would technically have to ask if he wants to play anything before your play your card.

2.9 If there are multiple action cards that players wish to resolve at
the same time during the strategy or agenda phases, players
take turns resolving action cards starting with the speaker and
proceeding clockwise. This process repeats until each player
has resolved all the action cards that he wishes to resolve
during that window.

2.10 If there are multiple action cards that players wish to resolve
at the same time during the action phase, each player takes
a turn resolving one action card in initiative order, beginning
with the active player. This process repeats until each player
has resolved all the action cards that he wishes to resolve
during that window.