Well, here's a do.

[Kontol]

In the following conversation, I'm confused as to why speaker B doesn't use "will" when answering A's question?

A: What is meant by "Well, here's a do," in the following context from Angela Carter's "Nights at the Circus":

Well, here’s a do, Sybil.’ Colonel Kearney addressed his pig. ‘The madmen take over the lunatic asylum.’

 B: I would interpret "do" here as meaning something like "predicament" or "situation.

 

[Tarheel]

More context is needed. For starters, what's the question?

(If he's talking to a pig he might be one of the madmen.)

 

[teechar]

Take a look at the entry under "c1" in the following link:/

would

1. used to refer to future time from the point of view of the past: 2. used to…

dictionary.cambridge.org

"(Would is) used to express an opinion in a polite way without being forceful".
"Will" is never used like that.