I'm not sure exactly how to run subsequent round of combat with regard to initiative. It is intended that the players and NPCs can continue to use any slot, or once they choose their slot in the first round, is that the one they use throughout the entire battle? This is important because there are several effects that last "until the start of the player's next turn" (Boost Shields action) or "until the end of the player's next turn" (Evasive Maneuvers action). If initiative remains open, this creates exploitable situations where a character can artificially lengthen or shorten an effect by taking a turn earlier or later in the following round.

For example, if a crew of three players on a YT-1300 are battling two TIE fighters, and the initiative orders is Player Slot, Player Slot, Player Slot, Enemy Slot, Enemy Slot, then the pilot of the YT-1300 could take the third slot and use Evasive Maneuvers, then take the first slot in the next round, causing it to end before his crewmates have suffered any penalty, thus getting all the benefits of Evasive Maneuvers and none of its drawbacks. This is only true is initiative remains fully open throughout the encounter however. If it "locks in", then the exploit cannot occur. However, I read the initiative rules closely and I can't quite figure out how it works in that regard.

If you read Step 4 on page 199 it states that you restart the steps for a round of combat but in the same order that was generated in the first round.

I had the some issue when I first tried out combat in the beta! Have fun! hope that answers your question.

Ah, but this only locks in the initiative slots not the character taking that slot, this can change each round.

Thats not how it reads to me. But to each his own. As long as your having fun playing whats it mater.

Indeed. The idea being that players (and the GM) choose who gets to go next in terms of working things to their advantage. It does mean that you could have one player effectively have two turns back to back if they go last in one round, and first in the next. There are some circumstances where this can be very effective.

Thats not how it reads to me. But to each his own. As long as your having fun playing whats it mater.

It's true that we should all play how we feel is best but in this case I do think you are mis-interpreting the RAW (not to say you have to play by RAW as it is your game and having fun is the most important thing)

step 4 says you use the same initiative order generated in step 1.

Step 1 tells you how to generate initiative slot order

Step 2 tells you how to assign the slots as PC or NPC

Step 3 tells you how to fill these slots with specific PCs or NPCs as they take there turn.

Step 4 rinse and repeat.

Of course I could be wrong.

The Initiative Order only decides whether it's a PC or NPC acting, not which one. Thus when the rules say to use the same Order, it doesn't mean it has to be the same player again.

Thats not how it reads to me. But to each his own. As long as your having fun playing whats it mater.

It's true that we should all play how we feel is best but in this case I do think you are mis-interpreting the RAW (not to say you have to play by RAW as it is your game and having fun is the most important thing)

step 4 says you use the same initiative order generated in step 1.

Step 1 tells you how to generate initiative slot order

Step 2 tells you how to assign the slots as PC or NPC

Step 3 tells you how to fill these slots with specific PCs or NPCs as they take there turn.

Step 4 rinse and repeat.

Of course I could be wrong.

This.

It's simply telling you to repeat the steps given for establishing initiative. There are alternatives (included in the CR I believe), which say you can choose to keep the same order established throughout the combat round, or even establish the order at the beginning of a session. But the way it works is steps 1-4. The order of the actual players doesn't matter, only the order of slots - PC,PC,NPC,PC,NPC .. as an example. Who fills those slots are decided by the players, and can even be changed mid stride during the encounter.

Initiative is not rigid like most systems. It thrives off of the players 'riffing' off eachother and events that occur during the encounter. So what one person might plan to do at the start of an encounter might change as events unfold before it gets to them. This narrative system gives players the flexibility to adjust and work off of what's going on, not just what was planned.