It's cause for the most part CoC's character's were free to interact with and react to the other characters in the game (player included). I'm not holding these characters are some paragons of writing, they weren't. But the authors actually tried to make their characters feel like they were part of the greater world and its narratives. The player could have different types of relationships with the same characters, giving them more dimensions and nuance than standard locked in routes. And subsequent updates and mods increased the level of crossover and character interactions to even greater heights.
CoC2 and TiTS suffer badly from the authors basically sandboxing many of their characters to specific locations and situations. These games remind us that "donut steel" is not just the default name of the player character in TiTS, but the default mentality that most mediocre furry and erotica writers have when making OCs. As a result the CoC2 authors clearly shield their creations from the player and greater story in ways that are to the detriment of the story and its readers. Some of these authors have argued that it's for the sake of a more consistent and realistic characterization, but really it's because they overidentify with these characters and can't bear to see these characters acting in ways they don't like. Meanwhile CoC1 actually let the players have far more freedom in how they interacted with the characers, and it elevated their characterization because you could see how the characters acted with regards to different situations and people.
It's natural for writers to be attached to their characters. But authors who want to actually write a good story need to be able to distance themselves from their creations somewhat and look at the bigger picture. I think DnD is a great comparison to this kind of game actually when it comes to priorities in writing. People who have been lucky enough to find themselves in good DnD/ttrpg groups know that the best DMs are the ones who don't try to insert themselves into the story as much but instead do their best to craft a story for the players to have fun in. Bad DMs often act like another player who happens to have God Mode enabled, and the players just grow bored and frustrated as they realize they're fighting some neckbeard's ego the whole time. That's what CoC2 feels like, and it fucking sucks.