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As written, some combat actions halve or quarter your strike penalties; other action inflict a straight penalty. Naturally, division makes luck a greater factor, but subtraction seems fairly weak against high bonuses. Accordingly, I've been leaning towards division for melee and subtraction for ranged. However, I am curious as to how other GM's run it.

I run it as written. Players who have read the rules have an expectation regarding the modifiers that will be applied and I must have a very good reason before I change anything. What benefit would be derived from your proposed change?

When I GM, most results are determined by GM fiat rather than the rolling of dice. As such, I have chosen "Other".

--flatline

Pretty much as written, but only when I remember it. So I chose "Other" because most of the time I don't remember the specific modifier and don't want to slow things down by looking for it.