Fuck AI

basically yes. technically, you still set a lot of immutable things within the system and establish rigid framework over everything so that AI doesn't go overboard - otherwise it just get instantly amorphous and falls apart.
i've seen two implementations - one featured chatgpt api and it basically freestyled a text adventure over a set framework - you still have to come up with questline patterns and faction dynamics formulas with AI playing up the immersion - things like weather, semi-randomized world-building encounters, basic dialogue. it was gimmicky but workable. the other one was much more sophisticated - it was built around ollama and it was basically all setting and faction politics built on THEREFORE BUT beats shuffling in and out - basically Fistful of Dollars kind of thing and the goal was to "sequence break" your way into endgame of sorts. So it was a bit of immersive riddle. It was clumsy but intriguing.