Wow thanks for this! I really really appreciate it. I've written down all of this into notes and going to incorporate it now. Question, which route do you think most players would prefer? A blank slate or a predefined character with his own thoughts and morals?
There is no one good answer to this, I think it depends on the developer and also the story. Coming in with another long reply with examples;
Does the character having a changable personality benefit the story and the setting? If you wrote the story with the MC becoming a benevolent guildmaster and creating a guild where everyone is appreciated, It would be weird if the MC is suddenly evil or ruthless. It seems like your initial aim is to create a good guy MC from the bakery storyline, which is completely fine. A MC that has a set character is easier to write around and also is of much more solid foundation. There are many non-linear RPG games in here that does not have a player defined MC. For example;
Renryuu Ascension is a non-linear RPGM game that has a main character that generally plays the role of a benevolent ruler. The world is open and free for exploration, and even though the content it offers is not necessarily reactive to the players' choices. But the MC has a clear character and does not step outside their expected character.
Harem Hotel is a super-popular illusion based harem collector with an over-arching story, that stars a pretty definite MC, your classic "straight-man" trope you see in these games. This works because the focus is not on the MC but on the content around the MC. I don't think this would work in your game because the MC is a main focus of the gamei and you want your main focus to show some personality.
If you were to let the players' descisions decide the character path of the MC, it would quite literally double your work to write the smae scene twice at least for two different character paths. Let me think of two games where a reactive MC is implemented and you can take a look;
A bad example of a bad implementation would be the game "Corrupted Kingdoms". The game acts like it gives you choices to be the bad guy or the good guy. But since the story of the game sincerely would not allow the main character to be the "bad guy" and still make sense, even if you act "cruel" nothing changes, the story progresses as usual and the player feels annoyed because the choices feel pointless. If adding branching personailty traits for the MC is not going to affect the NPCs, the story, or the scenes in a meaningful way, I would advise you to steer clear of it.
Now, a good example of a karma system would be -this is a hard example because it is hard to find a game that both fits the setting of your game and features a karma system among the ones I've reviewed- someting like, Trials in Tainted Space or Corruption of Champions (1 or 2 doesnt matter). Now these are inherently different from your game, they are text based sandbox rpgs, and they are able to go above and beyond when it comes to customisation of your own experience since it is text based. I would
not advise you to attempt at mimicking them simply because how astronomically large the workload of imitating the content available in a text based game in a 3d game would be, but you can maybe at least check out one of them and see how they handle character development when the entirety of the MC is dependent on the player, both physical and characteristic based.
A final thing I want to say, perhaps the most important, is what you feel like as a writer. This is your own story, and you ahve to be comfortable writing it. Most games which have branching paths in the smut genre fail, simply because the author is not comfortable writing some branches.
For example, if we dont beat around the bush, generally a benevolent path is more romantic and based around the feelings of love and built up trust, and the malevolant path is generally based around domination and emotional-abuse. Now, you may not be comfortable writing abuse, you may not like putting your NPCs in degrading or painful situations or you may hate the fact that you write an MC you would hate in real life. This is totally understandable, and you should avoid doing so, unless you truly believe you can do it well.
You can also follow the character path many corruption and harem building based games follow for their MC, which is what I call "Submission through loyalty and trust" where the MC becomes a paragon of leadership and trust, so much so that those around him feel compelled to follow him and submit to him, trusting that the MC will keep them safe and satisfied, overall It is all up to you and whatever you feel confident and comfortable writing. If you think you can handle the creative and the effortive load of writing branching paths in a story and enjoy doing so, go for it, if not, nothing wrong with a MC that stays consistent with his character path throughout the story.
I am open to more questions, if you want to ask anything else, I've dabbled in writing for a long time both professionally and recreationally before, I do not mind helping whenever I can.