Thought about this before, but actually just on LBC itself (though yes, I'm slowly really liking Bisq and their volumes are creeping up ever so slowly) but you've got some major problems to get over with.
Merchants don't want to know what's going on in background, you're right, but I really don't see how this is possible when you're reliant on trading to settle the Bitcoin (someone's got to accept your trade and then pay). It's impossible to do instantly for one... So even on LBC with presumably good liquidity, you'd still not sell as quickly as a processor settles (settled amount for processor is at time of purchase, but settled amount for your trades could be very, very different). Merchants who use processors want predictability for cashflow.
Even with very high liquidity where you'd expect instant fulfilment of orders, it'd require constant tweaking of the trades, even on auto adjustment of percentage, you'll always get someone to jump the queue on offers. Then, you get people who cancel trades and you've lost 15-30 mins and the price is gone.
Maybe I'm missing out on the idea but it really doesn't seem workable. Doable but not workable.
No, you're completely right on most points. A credit card purchase may be "settled" in that price is the same...but the merchant doesn't actually receive the money for a few days. Settling a bitcoin transaction may be faster but the price could change if you're trying to batch several small transactions throughout the day.
I think practically a merchant would need to choose a trustworthy or a couple of trustworthy traders (bisq would initially choose the highest rated, highest volume traders). It could almost be just a single trader they work with with the option of choosing another if they're not satisfied.
Maybe there could be a way to instantly trade for tethers or some other fiat pegged currency and then have the bisq trader trade the pegged currency for fiat.