This is a complex topic that can involve a lot of decisions by GM and Players alike.
My own treatment (and not all of this is backed up in the rules, just how I do it) is that ...
- Mindless things (rocks, tree's, other things who's MD is two anyway) are mostly immune to illusions. Page 267 says "Illusions require a conscious mind. Unless the spell description specifically states otherwise, a target that is unconscious or asleep cannot be affected by an illusion." It's not that they disbelieve, it is that they don't have the awareness to believe in the first place. So they are treated as having disbelieved. Note however that anybody seeing or otherwise sensing an inanimate object struck by a damaging illusion will see/sense the object being damaged. It will seem later on (a few minutes) that the object has been miraculously repaired while nobody was looking. Three melons struck by a crossbow bolt, an Ephemeral bolt, and a True Ephemeral bolt, all look the same at first. It is just that the melon struck by the Ephemeral Bolt healed itself a few minutes later when nobody was looking. The melon disbelieved, nobody else did.
- Creatures with animal intelligence almost never disbelieve illusions, except rarely in weird cases where they might be common. I can't think off the top of my head any creatures that rely upon disbelievable illusions to hunt, but some of their prey might have developed the instincts to allow them to choose to believe of disbelieve. But for the most part, I almost never have creatures with animal intelligence attempt to disbelieve spells.
- Going up the scale from there, it depends upon both intelligence and knowledge. I tend to assume that mister-farmer-in-remote-village has a fairly good rank in "knowledge legends and hero's" Learning the tales might be his principle recreation. Experienced adventurers, Major Horrors, and Dragons of course all are likely on the lookout for illusions.
I am not certain why Ferretmonger stated so positively that the target has to have said he was disbelieving before the spell is cast. He stated it with surprising certitude for a concept that I had never heard before. I mean a spellcaster does not need to specify his targets until the instant of casting, I don't see how/why all potential targets need to have specified that they are disbelieving a spell that may or may not be coming until they are actually targeted by it. Is that supported in the rules anywhere? I would not say you have to announce disbelief before the spell is cast, I would say you have to announce disbelief before the GM announces if the spell hit your normal MD.
The sequence I use as GM attacking PC's is I give a brief description of the attack "wiggling green glowing bolt", "ball of flame", etc and who it is targeting. I never ask if they want to disbelieve, but my players know that they have until I announce whether it actually hit them or not to stop me and say that they are considering disbelieving. If they don't stop me, I use their normal MD for the attack and then announce how many successes the attack had. They know that they have until I announce the amount of damage to stop me and say that they are considering using "Steel Thought". This keeps everything going rapidly but gives the players a few seconds between hearing something is happening to having it become irrevocable.
The sequence we use when a PC attacks an NPC is that the Player announces that they are preparing "a bolt" (or whatever), but I don't make him tell me if the spell is True or not until the moment of attack, then he reminds me it could be an illusion and I say "wait... OK what is it" while I figure out (or roll a dice) to see if the target is disbelieving. He states what it was, and I state whether the target was disbelieving or not. That procedure works well if the PC could be casting ether. In cases such as 'phantom fireball', where I know perfectly well that the illusionist does not have access to true version (which is elementalist only), but it is likely that the target would be less certain, I roll a dice. I will give the dice a plus or minus modifier depending upon the circumstances, knowledge and intelligence of the target. I mean if the dragon knows you are an illusionist and not an elementalist, he is likely to disbelieve.
My opinion on some of the other questions...
If somebody attempted to disbelieve a mind dagger, yes it would hit you as if your MD was 2, and you could not attempt to Steel Thought it.
An illusion is not just sight. They are also sound and feel. Also they are a hostile pattern impacting upon your own pattern. An illusion does not damage your meat, an illusion damages your pattern, and then your meat changes to match the damage to your pattern. Bonhumm wondered if a blindsiding illusion was not automatically disbelieved because the target was unaware of it. I would argue that a blindsiding illusion can't be disbelieved because it does it's damage before the target is aware of it, just like you can't dodge a blindsiding crossbow bolt.
The "Always disbelieve" tactic might make a bit of sense if you are very low circle, and your MD is only 6 or so. In that case, you are correct that they are more likely than not to hit you anyway, and your having disbelieved will only grant them one extra success. That one extra success is likely to still hurt however.
However if you are mid or high circle, the math changes. If you have managed to buff your MD up to where they often miss you, then you REALLY don't want to lower your MD all the way down to 2, in which case they definitely will hit you, and will get lots and lots of extra successes. Unless of course you are pretty darn sure the spell coming your way is an illusion.
However there is one cheesy tactical that your group might want to know about. If your group gets hit by a fireball or some other area effect spell. The player(s) with the highest MD and Steel Thought should not disbelieve, and if hit should attempt to Steel Thought it. Everybody else should disbelieve it even if they are 98% certain it is not an illusion. Area effect spells do damage according to the Highest MD in the area. So long as at least one person keeps their MD high, there is no penalty whatsoever to everybody else lowering theirs to 2, and who knows, maybe disbeliving an illusion.