As I recall in the novels until he tried to force himself on her in her sleep because he decided she was playing hard to get most of the interactions between the two were not super violent if you exclude the beginning with him getting knocked out twice by Lousie. Once for trying to put his hands down her blouse looking for a hidden microphone and the second time him asking her to knock him out because he thought the whole thing was a dream.
It was more tick for tack with Saito doing something then Louise responding sometimes violently but sometimes with a nonviolent punishment that would be completely ineffective. At least in the novels, I never read the manga or the anime so maybe she was different in those.
No, they were pretty violent and degrading on Louise's end even before that (eat on the floor like a dog, target practice for magic with Saito as the dummy, etc.), and later on got even more so as she got hopped up on magic. Like the shock collar for apparently spending time with another woman, or the time Louise got addicted to gambling and beat up Saito so he wouldn't safeguard their money from her, or even her randomly shocking him so that he'd know his place.
What I'm saying is - canon Louise is a bitch. A grade A bitch I wouldn't inflict on my worst enemy. Yes, she has reasons for her actions, but then so does everyone else, and those reasons aren't remotely justifiable for what she does. The only reason people even accept it is because the tsundere archetype and girls beating on guys for comedic effect is a popular trope in manga/anime.
Saito is a carefree, not too bright, perverted teenager - so for those people sick of that archetype, or overtly annoyed by perverted actions, they regard him as The Devil himself (or something). People also don't like stupidity, so when he makes boneheaded moves from time to time form their perspective, they just slap Louise's retaliation as justified, regardless of how over-the-top it is. It's annoying, but eh - it's fiction, no need to get all that bent out of shape about it.
As for this particular moment ... I think you guys aren't really grasping what was happening right there. Louise, Saito and Marteau had no plan. They had no hope of changing things. If they'd continued to say no to the mercs, Siesta would have been killed, followed by them (if the mercs were sadists, or afraid of retaliation). And they wouldn't have been able to do a damn thing about that. If nothing else, complying at least bought them time. Heck, even
Louise wanted to hold on to the wand for
sentimental reasons, not because she thought she was apparently a player character with maxed out diplomacy and could somehow talk them out of it.
This wasn't a situation with a 'right' option. If they'd refused, the mercs would have killed Siesta, potentially moved on to them. Complying gave them more time, but would still have resulted in that same situation. They were screwed
either way - it took a Deus Ex machina like Louise being able to cast magic without a wand or chant that saved them.
And no, they wouldn't have been able to resist if the mercs had followed through -
that was the whole point behind them getting stuck like that. That they
couldn't do anything against the mercs in that position.
This isn't an RPG game, where events like that have one path in them to come to a good ending. The moment the mercs had reneged on the deal, the moment they'd captured Siesta and Marteau, and basically gotten Saito and Louise in their sights and ready to be killed, they were screwed.
Saito didn't do the
dumb thing - he did the one thing that could let them survive some time longer, even if it still meant little hope for victory. Anyone who'd tried to get smart in that position would have been killed.