I find it a bit interesting that it isn’t more wrong. Has it ingested large tables and got a statistical relationship between certain large factors and certain answers? Or is there something else going on?

the game memorizes these moments, what you say, how they react, and creates story arcs based on it

LLMs famously can’t be consistent, so your fantasy game would have story arcs that doesn’t fit together, brings back characters that are already dead as if nothing happened, and everyone would have a son named Dorian.