Why is this a thing? I’m not for generative ai writing code and making art. I just feel like they’re shooting themselves in the foot here. I love that mod that basically acts as an impromptu dungeon master when you communicate with NPCs.
That's your right to enjoy that and there's a reason it's a mod, generative is too unpredictable for a company that focuses on high quality family friendly content.
What mod for what game are you talking about? Is the mod just writing flavor fluff or is it weaving in important information?
If it is the former, I don't care for it. I don't want to know that farmer John had a good crop of turnips. It is just filler fluff that does not build on the setting but simply makes it look busy for the sake of being busy.
If it is the latter, I would think that there is a risk that the AI NPC conveys information in a hard to understand or misleading way and players would have a hard time understanding what to do.
It's more like a quality control thing I guess. Generated content is going to be derivitive by its nature so banning it internally is forcing the devs to be creative.