Okay, I may be coloring outside of the lines on this as before installing the latest MBWBRW/patch/music I patched WB to the 1.170 level currently on the TW downloads page -- while I see in the OP that you have only certified this for 1.168 and older. I appreciate the amount of time and effort you have put into this, as well as your expertise, passion, and patience
-- so if this is on me because of my WB update, I apologize for that!
But what I am seeing is that after accepting his "come back with five men" quest and rounding-up a posse of village peasants that there was no merchant in the tavern (actually a "Mead Hall" in Grantebrycge
-- where I had materialized and received my maiden mugging).
Technically, there was a Mystic
Merchant both day 1 and the morning of day 2 when I checked, plus considerable number of other barflies -- but not the initial merchant who came to my rescue and gave the quest. I spoke with everyone in the establishment and none of them had dialogs indicating a knowledge of this quest.
EDIT: Okay a second data-point. I started another game choosing to materialize in Cantwarabuge this time and got a bandit quest. After suppressing the miscreants I back to my local mead hall for my reward and, though the joint was jumping, my merchant was AWOL.