| I'm not sure what bearing RPing or not RPing has on THIS case. You RP'd, the merchant RP'd back! You intentionally overpaid (1 plat instead of 5 gold) and the merchant informed you that he did not have a gnomish change-maker. No one broke character.|
The only reason you walked away without an alteration is that you wouldn't hand your bag over. Bildon asked you no less than four times to give him a bag to enlarge for you!
That being said, whether you RP or not during an alteration is pretty much up to you. Out in the lobby? Absolutely, keep it IC. In the workroom? We try to make allowance for clearly communicating ideas, so that every player ends up with the item they want.
In the middle of a huge list, or with a merchant that clearly tries to go very fast? Do what you can to keep the process moving. When there are 50 or more people still waiting for their turn, it's not necessarily the right time to launch an epic storyline between foes. Same goes for when there have already been 50 people helped -- the GM behind the merchant may be awfully tired at that point!
One last point -- GMs are almost never in a "bad mood" when they're altering, why would they do that to themselves?! The merchant may be in a bad mood -- that's called role playing.