Reading the matrix rules, I'm rather surprised to see that when you use AR, you use physical initiative rather than Matrix initiative. So that means that if I've got wired reflexes (or its magical equivalent) and high Reaction, I might be better off decking with AR (which is suppsedly more distant and less immersive) than with cold-sim VR. And as a bonus, I'm protected against biofeedback. (Hot-sim VR still has the +2 dice pool bonus, so that at least provides some advantage over AR + wired reflexes.)
Is this correct? Isn't this rather odd? And how do other GMs handle this?
Answer: The (hopefully) correct answer is in the comments of the accepted answer: Wired Reflexes and other initiative boosters don't simply boost your physical initiative, they boost your initiative, so you get the bonus even in VR, while rigging, and possibly even in astral space.