And FFG have responded:
Matthew Newman wrote:
You are correct; if Powder of Ibn-Ghazi is in your hand (and therefore not in your deck) at the time you start setting up the scenario, you cannot search your deck for it and put it into play for free, since the scenario setup occurs after drawing opening hands.
So, for the Powder owner, hard-mulliganing for your deck's key cards is a trickier call here than it often is, since mulliganing into the Powder becomes a nasty tempo loss. (Unless you drew it in your initial five, of course, when it's a no-brainer to shuffle it away and immediately get to search for it.)