It's a game. Fun is the literal definition of what I'm looking for

Yes, but tastes differ as to what fun is, and endless banal dialogue in Claudish would, for most people, wear thin as quickly as smalltalk with chatbots.

Same goes for AI-generated environments that are no more compelling than assets produced with traditional procedural generation techniques.

With that said, in games as elsewhere, there's a huge difference between quickly thrown together AI slop and development processes where AI is judiciously used as a labor-saving device.