No more pre-defined dialog trees for NPCs and more reactive interactions. An example from BG3:
Tap for spoileryou can find evidence that Isobel, the cleric who keeps Last Light Inn safe from the Shadow Curse, is the resurrected daughter of that act’s boss.
But you can’t talk to her, or anyone, about it, since those conversations were never written. With a system that generates NPC dialog on the fly, based on context and the NPC’s pre-defined parameters, you could.