I implemented the conversations in my game using almost the exact same approach, and it worked out OK – but if I were to do it again, I’d make two changes:
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First, I would definitely do this via carry out rather than instead rules. For the reasons laid out in this thread, it’s easy to get into trouble with instead rules, and I wound up creating lots of extra work for myself by using them (for example, in one sequence I wanted other characters to notice if the player was talking to somebody – this is trivial to do with an “after asking someone about something” catchall rule if you’re using the carry out asking approach, but much harder if you’re using instead ones.
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I’d use tables to organize the responses – it’s much neater and easier to edit, I think. See the Costa Rica Ornithology example to see one way to do this.