Let me get something clear: Does Systema use mass-fighting situations as a drill to improve the aforementioned benefits (which can incidently be useful in a brawl situation), or does it use them as a preparation for a brawl situation that Systema considers likely?
As far as the whole "moving-with-the-blow" idea, I'll give it a shot.
From my experience, if you tense a muscle before it's struck, it doesn't hurt as much as if it's relaxed and struck. Do you tense your abs before receiving a blow? If not, there go your instestines.
As for the issue of running away, this brings me back to my first point. Obviously we train to defend ourselves in situations where we can't run away, but is a brawl one of those? As opposed to fighting one or several, brawls are, like jellyman said, indiscriminate. No one's after you specifically. Why not move out? This is what I mean in my first paragraph: does Systema see a brawl as a situation similar to being attacked with a knife, where you have to neutralize the situation and come out on top?
Breathing to make the pain go away: I know exactly what you mean. I find it helpful myself, though I'd try to focus on avoid getting hit in the first place rather than emphasize dealing with pain over avoiding it.
Jerry,
On the issue of muscle contraction: I decided to give you the benefit of the doubt and try getting kicked to the quadriceps (hard) while contracting and while not contracting beforehand. I had my brother kick my leg while I contract the quads, then kick the other one (for a fresh start) while I didn't. Here are my findings:
Left quads (contracted):
Upon impact, there was some further contraction and some pain.
Right quads (uncontracted):
Upon impact, slightly less contraction than left quads and noticeably more pain.
As for the issue of fatigue and contraction, I honestly don't know. I'll look into it and get back to you.
I don't practice these skills. I practice others which can be applied to this situations.
Last note, the biomechanical manipulation. I watched the video again and couldn't for the life of me find any manipulation. Not a single armbar. I saw one takedown that didn't seem to be caused by sheer force, but then again, it didn't seem like the result of manipulation either. Maybe I missed something in chaos at the end?