We want all our AI encounters to appear like living, thinking beings, not mindless drones that blindly perform a specific task. They are driven by emotions and other states of mind, they have varying personalities, they remember interactions with others and form relationships, they have social and non selfish behaviours.
You might startle someone unexpectedly and cause them to become scared or agitated, but they may calm and reassess the situation. They might defend themselves, but not wish to harm their attacker and behave accordingly. They can understand a stranger fighting in their defence, and may be grateful. They might act to defend someone they care about. They can even, potentially, form social groups among themselves. These are some simple examples of things that are not predefined game mechanics, but that occur organically as part of the simulation. Players and NPCs are treated in the same exact way, based on observable behaviour alone. There is no cheating, no making decisions based on things they shouldn't know.