Things don't change.
This is simply false, as a statement, so I won't treat it on it's own.
It has an intended interpretation that isn't false, which I referred in the following statements which you've accepted. (It's more of a summary than a separate point.)
The future is what it is given your actual decision,
True. But making choices requires that one accept that one doesn't know what the future is, nor does one know what one's decision will be. It requires the use of "if... then" thoughts, or counterfactuals.
Yes. If there is a (logical) fact in what your actual decision is, say it's actually A, and you are uncertain about what it'll be, then the assumption A=B is logically false, inconsistent, even if you don't know that it is. When you reason about what happens if A=B, not knowing that it's a false statement, you are reasoning from a false premise, and everything logically follows from a false premise. This is the relevance of this description.
all else is fantasy
Emotional dismissal, not an actual point.
Not emotional. What else is there? There is reality, and then all the thoughts you can have to reason about reality.
A good counterfactual should be logically consistent. It isn't the real world, but the real world isn't the only logically consistent possible world.
If there is a fact of the matter of what your action is, then assuming a possible action that is not actual is logically inconsistent. This is normal. If you are considering something that is not the real world, you need to explain what relation it has to the real world, and how this particular not-real-world is different from all the other not-real-worlds, and what this not-real-world actually is, especially if it's inconsistent, but even if it's consistent, there is still the same question of what privileges it, since it's not the real world, and real world is what you want to reason about.
perhaps morally important fantasy whose structure we ought to understand, but still not the reality.
Dismissal, not an actual point.
It's a point that it's unclear what relation is there between the counterfactuals and reality, given that counterfactuals are usually not the reality.
EDIT: So, which of those are you claiming I contradicted exactly?
You referred to "slightly modified version of the past", and modifying things is starting to consider things other than reality, where it becomes unclear how considering those not-real things helps to understand reality. (Uncertainty is a much better concept than change in this context.) I would further qualify that you can't change your notion of reality without moving away from your original notion of reality, and thus conceptualizing something other than reality, when what you wish to understand is reality, and not this not-reality you've constructed by modifying the concept.
Yes. If there is a fact in what your actual decision is, say it's actually A, and you are uncertain about what it'll be, then the assumption A=B is logically false, inconsistent, even if you don't know that it is.
Where is the inconsistency?
If you assume both that the actual action (A) and the possible, but not actual, action (B) you have an inconsistency.
But if you assume only B; ie. you assume a world as similar to this one as possible where you are such that you will choose action B, then it is perfectly consistent.
...hen you reason about what happens
Keep in mind: Controlling Constant Programs, Notion of Preference in Ambient Control.
There is a reasonable game-theoretic heuristic, "don't respond to blackmail" or "don't negotiate with terrorists". But what is actually meant by the word "blackmail" here? Does it have a place as a fundamental decision-theoretic concept, or is it merely an affective category, a class of situations activating a certain psychological adaptation that expresses disapproval of certain decisions and on the net protects (benefits) you, like those adaptation that respond to "being rude" or "offense"?
We, as humans, have a concept of "default", "do nothing strategy". The other plans can be compared to the moral value of the default. Doing harm would be something worse than the default, doing good something better than the default.
Blackmail is then a situation where by decision of another agent ("blackmailer"), you are presented with two options, both of which are harmful to you (worse than the default), and one of which is better for the blackmailer. The alternative (if the blackmailer decides not to blackmail) is the default.
Compare this with the same scenario, but with the "default" action of the other agent being worse for you than the given options. This would be called normal bargaining, as in trade, where both parties benefit from exchange of goods, but to a different extent depending on which cost is set.
Why is the "default" special here? If bargaining or blackmail did happen, we know that "default" is impossible. How can we tell two situations apart then, from their payoffs (or models of uncertainty about the outcomes) alone? It's necessary to tell these situations apart to manage not responding to threats, but at the same time cooperating in trade (instead of making things as bad as you can for the trade partner, no matter what it costs you). Otherwise, abstaining from doing harm looks exactly like doing good. A charitable gift of not blowing up your car and so on.
My hypothesis is that "blackmail" is what the suggestion of your mind to not cooperate feels like from the inside, the answer to a difficult problem computed by cognitive algorithms you don't understand, and not a simple property of the decision problem itself. By saying "don't respond to blackmail", you are pushing most of the hard work into intuitive categorization of decision problems into "blackmail" and "trade", with only correct interpretation of the results of that categorization left as an explicit exercise.
(A possible direction for formalizing these concepts involves introducing some kind of notion of resources, maybe amount of control, and instrumental vs. terminal spending, so that the "default" corresponds to less instrumental spending of controlled resources, but I don't see it clearly.)
(Let's keep on topic and not refer to powerful AIs or FAI in this thread, only discuss the concept of blackmail in itself, in decision-theoretic context.)