Quote Originally Posted by Tanarii View Post
My answer to this is based on evaluating three things:
Were they armed? Are they PCs, or facing PCs, in a environment other than a somewhat relaxed social situation? Can they perceive the other side before combat begins, especially at close range (standing right there)?

If yes to all, they were alert enough to the possibility of a fight that surprise is not possible when combat begins.
I see your point, a couple of counters to it thought (allow me to play Devil's Advocate)

There's a different between being armed and expecting combat. Most police forces in the world will carry some form of weapon but can still be surprised by fights breaking out. So being armed and having a weapon drawn would make the difference, the weapon being drawn indicates intent, a weapon holstered would be normal for nearly every creature in D&D. Even peasants are likely to carry daggers or knives to protect themselves.

I would argue that being a PC doesn't matter. The NPCs don't know they're in a game (please no metaphysical nonsense :P), ask yourself, if this was a story you were telling someone else, or writing, and ignoring the fact there were players behind the actions, how would it be written? One guy takes out a dagger at the end of the peace talks and stabs the chieftain dead, and immediately without even a few seconds hesitation and surprise everyone in the room is attacking one another? Or he stabs him, the room explodes into a frenzy after everyone pauses to take in what happened over a few seconds? The second is a more realistic scenario. NPCs shouldn't get magical combat sensing treating just because they're up against the PCs, as far as an NPC is concerned these guys were just diplomats.

Again, just being able to perceive someone doesn't mean you'd be ready if a fight breaks out. The question I ask, is which parties are PREPARED for combat, admittedly, RAW they wouldn't get Surprise, but RAI there are lots of situations you could get advantage without being explicitly stated in the rules, the idea of "Rulings not Rules" implies a DM can make decision.