I’ve seen LLM NPC’s and whilst they’re still far from being convincing, I don’t imagine it’ll take too long for them to get there.
I can’t wait for a GTA style game (maybe even GTA itself) where I can just walk by someone on the street and have a completely normal dialogue with an NPC. Or even just start shit by yelling at people or causing beef between two of them by suggesting one insulted the other.