Being that I've been watching you guys since the early days of coc 1 can you explain why you disagree?
Because 95% of CoC1's characters were cardboard flat smut dispensers. They weren't interesting at all outside of the fetishes they provided. They were
memorable, certainly, (Mister X. from
Resident Evil 2 is memorable, too, and all he does is Koolaid Man through walls and power walk at you) but making an argument that they were deep and developed characters is speaking from a place of raw nostalgia. The reason you remember them so fondly is because they were likely the first time you were exposed to these fetishes in this sort of game environment.
Let's take Sophie for example. She's
my favorite waifu from CoC1... but she has literally no character development at all. The only thing that differentiates her from every other harpy in the setting is that she's a big titty milf instead of a smol titty milf. Her entire character "arc" is you asking her to come to your camp... to which she says yes so that she can get easier dick 24/7. Aaaand that's the end of her story. Hell even if you bimbofy her and then unbimbofy her, she'll still just huff about it and then resume being a smut dispenser with no rammifications.
How about Amily, everyone's favorite breeder mouse? The whole reason she wants to get with you is to save her species... but she'll happily change her species if you don't like furries. Because she exists to dispense smut scenes, nothing else.
Well surely Isabella, the traveler from another world, must have a deep and compelling sto-- oh, she also has 0 character development and just sits around sucking smol dicks all day, and moves to your camp to... get more dick.
You get my point, yes? If you actually look critically at most of the cast, even the camp followers, what you see are flat characters with a bare minimum of story to them -- if any at all. The reactivity and interaction you mention TiTS lacking doesn't exist in CoC1 at all; few if any characters ever interacted with each other in camp. The only time that changed was near the very end of the game's life cycle, when threesome queen Helia arrived and then Bath Slut's public milk bath were added. By that point Sophie had been in camp for literal years and hadn't said a word to anybody else in camp. Marble had one scene where she got jealous of Amily... but if you brought in any waifu except her, Marble didn't say a word. How could she, when none of those characters existed by the time her author abandoned working on her?
There are a handful of exceptions, of course: Helia and Urta have the opportunity to grow as characters over their quest lines, and Kiha probably has the most impactful character arc of anybody in the cast. But they make up a tiny portion of the characters in the game.
Now, you're
correct in saying that TiTS has the same "problem," if you want to call it that. TiTS' cast is several times larger than CoCs, but it maintains about the same percentage of flat smut-dispensing characters... which is to say, the overwhelming majority. A few like Syri and Reaha have the chance to grow and change over the course of the game, but nearly every character you meet in town exists for the exact same reason people like Edryn and Cinnibar and Roxanne existed in CoC1: they're gonna put out fetish text porn scenes when you click buttons. Otherwise, they're just flat faces. That's all they were ever meant to be.