So with a safe prompt there is always a chance the AI will go on a bad direction and then refuse to work, and make you pay for the tokens of his "I am sorry ....long speech"
In theory, a full blown LLM gives you a lot more variety and ability to handle novel situations, but it also gives you a lot more potential for conversational gambits that don't affect the game mechanics in the way you want them to and general weirdness (I love the article's anecdote about the Sim who thinks his neighbour Adam Smith wrote Wealth of Nations!). I'm sure someone will ultimately end up designing great LLM-driven game experiences, but I don't imagine they'll look much like The Sims.
It's what I always find with open world games for example. No matter what kind of character I build or how I behave I'm only ever going to get predetermined dialogue which I could have looked up and saved myself the time.
Yes in the sense of the Sims it's probably overkill (they sold millions of copies even without a script) but it's only being used as a playground to test the ideas and see what's possible, there's no suggestion that this is particularly what the Sims itself should be.