In searching for answers to this, I've come across an interesting point on the Paizo forums. If you are in one of the far corners and you consider these not threatened, then you can diagonally move towards the character and never provoke an AOO (that is, per RAW)... and yet, logically, a threatened area should make an uninterrupted circle around the creature. This may explain why 3.5 made an exception out of this.
Yes, that is precisely why 3.5e made that exception, and it’s also why Paizo issued an official FAQ that changed Pathfinder’s rules to add the same exception, as @caps reports in this fine answer that you should go upvote.
Thus, a reach weapon can attack the following \$X\$’s from \$C\$:
\begin{array}{c|c}
\phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} \\ \hline
& X & X & X & X & X & \\ \hline
& X & & & & X & \\ \hline
& X & & C & & X & \\ \hline
& X & & & & X & \\ \hline
& X & X & X & X & X & \\ \hline
\\
\end{array}
Before the FAQ change
However, the FAQ entry that caps reports did not exist at the time this question was asked. At that time, you did not get the four corners, and so could only attack these \$X\$’s from \$C\$:
\begin{array}{c|c}
\phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} & \phantom{X} \\ \hline
& A & X & X & X & & \\ \hline
& X & B & & & X & \\ \hline
& X & & C & & X & \\ \hline
& X & & & & X & \\ \hline
& & X & X & X & & \\ \hline
\\
\end{array}
Here, it would appear that someone could step from \$A\$ to \$B\$ to avoid an attack of opportunity altogether. However, even before the FAQ just changed this to be like 3.5e, the developers at Paizo had ...for lack of a better word, we’ll call it a clarification, though it honestly just confused me more. From an earlier FAQ:
Can you or can you not attack diagonally at a distance of 2x squares (15'=10' exception) with a reach weapon?
James Jacobs: Nope. A reach weapon gives a specific extension to your reach. When you count out squares, since every other square is doubled when you count diagonally, that means that there’ll be corners where you can’t reach.
Sean K. Reynolds: It's an artifact of the grid. The closest the rules come to addressing this is in Large, Huge, Gargantuan, and Colossal Creatures, which says:
Unlike when someone uses a reach weapon, a creature with greater than normal natural reach (more than 5 feet) still threatens squares adjacent to it. A creature with greater than normal natural reach usually gets an attack of opportunity against you if you approach it, because you must enter and move within the range of its reach before you can attack it.
So just because the grid has a square for "15 feet away" and a square for "5 feet away," but no square for "10 feet away," using that corner path doesn't mean you're magically teleporting from 15 feet to 5 feet; you are passing through a 10-foot-radius band around the creature, and therefore you provoke an AOO.
Admittedly it's not clear, and obviously it doesn't have the diagram in the 3E book to provide a non-textual example, but it's supposed to work as I described above.
Basically, the idea was, under the rules at the time, you didn’t threaten 15 ft. away, so you don’t get the corner, but you did threaten 10 ft. away and there’s no way to move from 15 ft. away to 5 ft. away without passing through a point that is 10 ft. away. Thus, someone moving from 15 ft. away on the diagonal to 5 ft. away on the same diagonal was going to provoke even under these rules.
So the enemy at \$A\$ moving to the point marked \$B\$ towards \$C\$ with a reach weapon provoked an attack of opportunity (assuming this isn’t a 5 ft. step of course), because somewhere between \$A\$ and \$B\$, there is a point that is 10 ft. away from \$C\$ that the enemy has to pass through.
Presumably, you would have adjudicated the enemy’s position for the purposes of the attack of opportunity as being \$A\$, though this was never made clear. In this sense, the end result was identical to the 3.5e/post-FAQ version for movement towards you: creatures leaving that corner square to enter a square inside your reach provoked an attack of opportunity as if you threatened that square. You were not eligible to make an attack of opportunity if the enemy performs any other action that provokes from \$A\$, including movement in other directions, because you do not actually threaten it.
This was a headache. Even before the FAQ changed things to match 3.5e, that was precisely what I recommended:
Reach weapons are one of the few fairly-nice things that melee can get. There’s really no need to nerf them. I strongly suggest that you straight-up ignore this nonsense and use the 3.5 rule. The exception to the usual calculation of ranges in the case of reach weapons is weird, but clearly there was a good reason for it: without it, you wind up with this mess.
Rules Compendium p. 150 (emphasis mine):
A reach weapon is a melee weapon that allows its wielder to strike at
targets that aren’t adjacent. Most reach weapons double the wielder’s
natural reach, allowing the wielder to attack at that reach but not
within its normal reach. A typical Small or Medium wielder of such a
weapon can attack a creature 10 feet away, but not a creature in an
adjacent square. A Large wielder wielding a reach weapon of the
appropriate size can attack a creature 15 or 20 feet away, but not
adjacent creatures or creatures up to 10 feet away. Tiny or smaller
creatures gain no advantage from reach weapons.
Rules Compendium p. 151:
A wielder gains no reach from a reach weapon that is too small. No
additional reach is granted by a reach weapon that is too big.
Based on those two things, we can answer your two questions:
- No. Tiny creatures threaten no squares around them, and reach weapons don't benefit them. As a larger reach weapon doesn't convey any extra bonus, they don't get any reach no matter how big the weapon is. (Though the mental picture of a tiny creature using a gargantuan halberd is pretty funny.)
- If the weapon is inappropriately small, they do not gain a reach boost at all. If it's inappropriately large, they do not gain an extra reach boost, but they would gain the normal reach boost for a creature of their size using a reach weapon. So a Dwarf using a large spiked chain gets the same reach as a Dwarf using a medium spiked chain.
I think your proposed feat is going to work as you intend. A fine spiked chain won't convey any reach, it'd just be like using a melee range weapon only doing a lot less damage.
Specific Q/A
Basic Question: Does a grig (MM 235) wielding a Tiny longspear (PH 116, 119) (2 gp 5 sp; 0.9 lbs.) threaten no squares, adjacent squares,
or squares 10 ft. away?
The grig is tiny, using a reach weapon. It therefore threatens no squares.
Then: What about a grig wielding two-handed a Small spinning sword* (Secrets of Sarlona 137-8) (50 gp; 3 lbs.)?
Threatens no squares. The spinning sword definition says that it's a reach weapon, and tiny creatures do not gain reach from reach weapons.
Then: What about a human wielding as a light weapon a Tiny longspear?
Threatens his natural reach only. Undersized reach weapons convey no reach, but they don't take away your natural reach (since said human could just punch that square).
Then: What about a human wielding two-handed a Large spinning sword (100 gp; 6 lbs.)?
Yes, the human would threaten squares 10' away, and 5' away (as the spinning sword works at close range, like a spiked chain).
Does The Rules Compendium Contradict The SRD/DMG?
No, it doesn't. The SRD's reach definition is as follows (emphasis mine):
Glaives, guisarmes, lances, longspears, ranseurs, spiked chains, and
whips are reach weapons. A reach weapon is a melee weapon that allows
its wielder to strike at targets that aren’t adjacent to him or her.
Most reach weapons double the wielder’s natural reach, meaning that a
typical Small or Medium wielder of such a weapon can attack a creature
10 feet away, but not a creature in an adjacent square. A typical
Large character wielding a reach weapon of the appropriate size can
attack a creature 15 or 20 feet away, but not adjacent creatures or
creatures up to 10 feet away.
Tiny creatures have a natural reach of 0. If you double 0, you get 0. Thus while the RC definition is lengthier, it doesn't contract what the SRD or DMG say.
The only thing in the SRD about oversize/undersize reach weapons is the bit in the above quote about using a reach weapon of the appropriate size. The RC expands on this, but again doesn't contradict what is said. (You could argue that in the SRD, an oversize reach weapon also doesn't grant reach as it's not "appropriate", but they didn't really spell out what they meant so I don't find the RC version problematic.)
Can A Tiny Creature Ever Get Reach?
Yes, as the DMG mentions:
Tiny, Diminutive, and Fine creatures have no natural reach. They must
enter an opponent’s square (and thus be subject to an attack of
opportunity) in order to attack that opponent in melee unless they are
armed with weapons that give them at least 5 feet of reach
That makes it clear that tiny creatures are not forbidden from getting reach, if they have some way to get it. Some examples of ways to do that:
- Shadowstrike (MIC) - On a weapon, activated to give that weapon +5' to it's reach. As it's just a flat addition to reach, it works even if the creature has 0' reach normally.
- Lunging Strike (PHBII) - Feat that allows you to make an attack with +5' to it's reach. Again this is a straight addition, so it works even if you had 0' reach.
- Inhuman Reach (LoM) - Feat that increases your character's natural reach by +5'.
What About Whips?
Whips have a different wording than the other standard reach weapons, as shown here:
The whip is treated as a melee weapon with 15-foot reach, though you
don’t threaten the area into which you can make an attack. In
addition, unlike most other weapons with reach, you can use it against
foes anywhere within your reach (including adjacent foes).
Compare to the Spiked Chain (another reach weapon that works in melee range):
A spiked chain has reach, so you can strike opponents 10 feet away
with it. In addition, unlike most other weapons with reach, it can be
used against an adjacent foe.
The "X has reach" wording on the chain is the same as you see for every reach weapon in the SRD, except the Whip. The first part of my answer covered how those work with larger and smaller creatures. But is a whip special?
- The strictest possible reading says that a whip is treated as a melee weapon. It also happens to have a 15' reach, and that number is specific. Does it change for larger or smaller creatures? The rules don't say. If you wanted to do a very strict reading, it's always 15', no matter the creature size. This starts to make no sense with gargantuan or larger creatures as it actually lowers their natural reach, and would give tiny creatures 15' reach with a whip and 0' reach with any other weapon, so it doesn't work very well at the table.
- A less-strict reading would instead say that a whip is a reach weapon (that can also strike in melee, like a spiked chain) that adds triple to the natural reach, instead of double for normal reach weapons. That means a whip scales up for larger creatures like other reach weapons do (except farther), and tiny creatures get no reach at all when using one. This has the virtue of being consistent with how reach weapons normally work. Also working in the favor of this one is that the reach weapon definition mentions whips as a reach weapon.
So for whips, it comes down to how much stock you put into the odd wording compared to other weapons. I can't give a reference for what the writers actually intended to do there, as one doesn't seem to exist. I do know that the second option is far more consistent in how it plays, so I would certainly favor it in actual play.
Best Answer
If I understand your system correctly, it will give rogues an automatic way to activate Sneak Attack:
The green character is the Rogue and the blue one is an enemy. On his turn the rogue steps two squares to get behind the enemy and turns for free. He attacks (with advantage, -2 to enemy AC, and possible more reduction due to the shield), activating Sneak Attack, and then gets to step back two more squares using his leftover movement.
On top of this you should consider things like whether a fighter can riposte to an attack done from the red zone.
Is an enemy/ally in red zone considered to be visible? For example Rogue's Uncanny Dodge says (emphasis added)
Can a rogue still activate it while being attacked from behind?