If another character had also delayed and they both decided to act now then they would do an opposed Agility test to see in which order they act, although both would act before B. Any alternative makes the Delay action stronger than Overwatch and removes any use for it.
I like the example; mostly because it seems to fit with my experience with delays in other systems I've played.
On that not I can only comment from my experience from other systems:
Delay actions are a common thing in D&D and they don't interrupt an action, you just get to insert your turn somewhere else in the initiative order. There are Readied actions that let you do exactly that but, like overwatch, you have to specify what the action is and what the trigger will be. IF there is no trigger before your turn comes around, then you lose your turn for that round. I think it's probably more like a Delay than a Readied. But that's just my opinion. Also, if 2 people delay and want to act at the same time, the person with the higher initiative always gets to go first...or if 2 people who readied want to go last, the person with the highest initiative gets to do so - ie: they have the advantage because they won initiative. That's just how it works in D&D.
I don't buy that an opponent would lose his dodge because you're doing an attack on the opponents turn. It's great for things like double-team, where you delay your action until an ally moves to get your bonuses. Although it's a half-action to delay so I'm not sure how that'd work.