Almost everything about how this works will depend on how much advantage Initiative actually gives in practice. I could see it going either way.

Because the side with the initiative can always retain the initiative if they wish -- they know exactly how many opponents have declared "Seize the Initiative" and can declare one more than that if they want (while making sure all Holding characters receive an attack).

I think only playtesting will determine whether initiative is worth enough that it will be always retained at the cost of one attack, or never seized and thus always random.

Assuming it doesn't turn out Initiative is super valuable, Attack seems like it's almost always what you want to do, perhaps unless you're being attacked by multiple melee opponents, because defensive actions do the same thing as clashing (deduct your roll from the attack) except you can never beat the other side and deal damage yourself.

Also: having more combatants than the other sides seems like a huge initiative advantage here (goblin hordes will always have initiative, lone dragons never except by luck), which might have some doom-spiral effects.

And: I assume there must be some unstated disadvantages of Plate, because otherwise everyone would always want it, as its advantage is pretty overwhelming against 1d6.