Can a Transaction with a Lower Gas Fee Still Be Included before a Higher-Fee Transaction?

Yes, in systems that rely on a first-price auction, a lower-fee transaction could theoretically be included first if the higher-fee transaction was submitted later and the block producer simply chose the earlier one. However, in MEV-driven systems, the block producer is economically incentivized to select the transaction that offers the highest total value (fee + MEV bribe).

In EIP-1559, the validator prioritizes based on the highest priority fee.