I can now repro in 61.0.3163.39 as well. 

Interestingly, this appears to be a problem with having the developer tools open. Without opening the tools, I can refresh at will. When I hit F12 to open the tools, Refresh immediately begins to fail and I get the console notification.

I disabled both SiteIsolation and TopDocumentIsolation.

The repro seems to depend on chrome://flags/#browser-side-navigation; it repros when Enabled and does not repro when Disabled.

The problem is that NavigationHandle.IsRendererInitiated() returns true for reloads.

Interestingly, right-click and "Reload" doesn't have this problem. I wouldn't expect rightclick+Reload to be different than F5.

Re #3: I was only repro'ing with the DevTools open; do they somehow capture the F5 and re-dispatch it?

Great point. They are not capturing F5, but chrome's ReloadInternal() delegates the reload to DevToolsWindow: 
https://cs.chromium.org/chromium/src/chrome/browser/ui/browser_commands.cc?rcl=78ab7a20a5d3a321ee8262b82970c08bf8bc894d&l=255

DevTools then calls InspectorPageAgent::reload() which calls LocalFrame::Reload() which will initiate a renderer-initiated navigation.

In that case, this is a devtools bug where it causes all browser-inititated reloads to be renderer-initiated. I'm downgrading this back to P3 given that it only happens when the console is open.

DevTools team, can you please take a look?

Cool! So it sounds like there may be two issues then:

1. The issue raised in this bug, whereby all browser-initiated reloads are converted to renderer-initiated, and 

2. Whatever scenario DevTools has for intercepting refresh isn't achieved when Right-Click>Reload is used to reload the page.

Yes, the context menu is directly calling webcontent's NavigationController.Reload(): https://cs.chromium.org/chromium/src/chrome/browser/renderer_context_menu/render_view_context_menu.cc?rcl=8ea62164a55064489614aa0a038743b8419c2312&l=1794

So there is at least 4 different ways to reload a page, each doing something different :p

1. F5, Shift+F5
2. Reload button in the navigation bar (hopefully same as (1))
3. Right click -> Reload
4. window.location.reload()

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/bcd23d6f4f2986c65794188c2a0cc94e87d32b52

commit bcd23d6f4f2986c65794188c2a0cc94e87d32b52
Author: Andrey Lushnikov <lushnikov@chromium.org>
Date: Thu Dec 14 19:38:03 2017

DevTools: fix reload for data URLs.

This patchs starts running browser-side reload for data URLs.
Note: this means that "scriptToEvaluateOnLoad" argument will be ignored
when reloading data URLs.

BUG= 754470 
R=dgozman

Change-Id: Ib0a07a4395ea2aca881958587e82d18dded81d95
Reviewed-on: https://chromium-review.googlesource.com/823702
Reviewed-by: Dmitry Gozman <dgozman@chromium.org>
Commit-Queue: Andrey Lushnikov <lushnikov@chromium.org>
Cr-Commit-Position: refs/heads/master@{#524144}
[modify] https://crrev.com/bcd23d6f4f2986c65794188c2a0cc94e87d32b52/content/browser/devtools/protocol/page_handler.cc
[add] https://crrev.com/bcd23d6f4f2986c65794188c2a0cc94e87d32b52/third_party/WebKit/LayoutTests/inspector-protocol/page/reload-dataurl-expected.txt
[add] https://crrev.com/bcd23d6f4f2986c65794188c2a0cc94e87d32b52/third_party/WebKit/LayoutTests/inspector-protocol/page/reload-dataurl.js
[modify] https://crrev.com/bcd23d6f4f2986c65794188c2a0cc94e87d32b52/third_party/WebKit/Source/core/inspector/browser_protocol.json
[modify] https://crrev.com/bcd23d6f4f2986c65794188c2a0cc94e87d32b52/third_party/WebKit/Source/core/inspector/browser_protocol.pdl