The implicit guardrails these companies are going to add which will complicate things.

That'll just have to be part of evaluating whether a game is "good" or not, I guess. If game companies hobble their NPCs with all sorts of limitations on what they can talk about then it'll harm the reception of the game and drop its metacritic score.

I do see some interesting hurdles that were likely never imagined when the rules were written. How do you come up with an ESRB rating for a game where you don't know what topics your NPCs might talk about or what sorts of quest lines might ultimately be generated?

Numerous game-breaking states because you're risking a more traditional Dungeons & Dragons Dungeon Master problem where your party somehow has failed to ask an NPC the right kind of questions or even consider that they might have information relevant to the campaign. How do you get this information across if the player isn't somehow prompted to attempt it?

That seems like something that an AI-driven game might actually be better at, if properly done. The AI could review the dialogue the character has participated in so far and ask itself "has the player found out the location of the cave with Necklace of Frinn yet?" And if it sees that the player just keeps on missing that vital clue somehow it could start coming up with new ways to slip that information into future dialogues. Drop hints and clues, maybe even invent a letter to have delivered to the player, that sort of thing.

Whereas in a pre-scripted game if a player misses a vital clue they might end up frustrated and stuck, not knowing they need to backtrack to find what they overlooked.

I think this AI stuff is a cheap cop-out that uses way too much energy for a weak result.

If the games using AI aren't good then they won't sell well. This is a self-correcting problem.