"I think when people use NPC as an insult (it is a dumb insult in my opinion)"

It's a great insult, because it is usually used to describe someone whose viewpoint is basically a brainwashed and braindead pre-programmed one (either through upbringing or other things) and clearly demonstrating a lack of self-conscious critical thought.

It’s funny, because one might argue that a lack of awareness of, or empathy for the fact that other people also have thoughts and autonomy also demonstrates a lack of self-conscious critical thought.

Yet the NPC is the one who gives the player work. And meaning, in terms of the played character.

It's just "sheeple" for this decade. The hoi polloi. Same as it ever was.