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How KOTOR I dialog works is, you can only speak with a character on a certain topic once you have reached a certain level/XP. Until you reach the alicated XP/level through either fighting or proceeding through the game you cannot speak with the character about their life story.
In some ways I prefered KOTOR I's dialog system to II. I could say what I wanted and still learn more about the character. Although, KOTOR II teaches players to think before they say.
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