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So far this has yet to matter, but it might. When a Phoenix Myrmidon uses Combustion, does it still get its' initial melee attacks?

I dont have the rulebook in front of me but IIRC Combustion is a "* Attack" (Special attack) so no it won't get its initial attacks.

While it is an attack, it also says "This model can make additional melee attacks after making this special attack". Does it mean I can buy additional attacks with focus or that I get my initial attacks on top of combustion?

Combustion replaces your initial attacks. You can buy additional melee attacks after doing combustion.