I think there is a skyrim mod that lets hook up an LLM to the NPCs so you can talk to them, the problem is that the rest of the game design doesn't really support that. So the novelty wears off quite quick.

There is probably some limited utility for using ML in games, lifelike multiplayer bots trained on behaviour of different types of players.

I think in most scenarios good gameplay comes from iteration which comes from tweak-ability, you see players get stuck in area x so you do a minor or major adjustment to area layout, enemy composition, or give the players more tools. If something is controlled by an LLM it becomes unpredictable and hard to reason about for both player and designer, and consequently also hard to adjust.

I think it is possible there is some role for LLM's in games, like how Left 4 Dead had an AI (this is classic AI not ML) director who would decide how to structure enemy waves and for example send a boss after a player who strays too far from the rest. But even there rules based AI is probably easier to adjust for the designer.