Well, I think it’s pretty clear in the games I pointed to (and I’d cite Ruins which like Balloon Diaspora is by Jake Elliott – you should be playing his games, guys!) Just because the dialogue is about how the characters feel about things that have already happened doesn’t mean that their responses to the dialogue have to be obscure; usually you can tell that the dialogue has responded to the choice you’ve taken in some way. And the interactivity doesn’t have to leave some lasting change in the world-state, either; Balloon Diaspora is full of what Emily Short calls (in her Life Flashes By writeup “reflective choice,” where you’re saying how you interpret what’s happened, but I don’t think any of those choices determine what happens later. Still, it’s interactive.
(Maybe worth noting that Balloon Diaspora is the only game I’ve mentioned that fits the “character goes around and talk to other people” model – Life Flashes By and Ruins take place in mental landscapes, and I think Spectre probably does too; anyway the interaction is very different from the point-and-click model.)
I think that’s the issue. Things might be procedural generated or procedural rearranged. What is generated tends to loose authorial voice - and I’ll say that, at this moment, this is necessarily so, but I’m open to be proven wrong. What is rearranged tends to be taken/marketed as generated. I remember something done by Aaron, in which the narrative was somehow procedural, and depended on the input of the player, but the pieces of sentences, and the way they fitted together, were written by Aaron, and had his voice. They were not generated by an algorithm, they were rearranged by one.