I view the part I highlighted in bold as a misconception. My advice is to work out how to roleplay the character from first principles every time it comes up. The character's personality. motivations, and goals are what they are but how the character acts on them at that moment in the campaign is not predetermined. At least in my campaign circumstances are too nuanced for me to do that. Instead I look through the character's eyes and imagine what would happen based on what the character see and known. If a bunch of things leap then maybe I will dice for it. Often there one or two things and it straightforward what to do as a result.
The only time something predetermined happens is that the PCs are not around. To be specific what they did or not do hasn't intersected what the NPC is doing or not doing. Then and only then will things proceed in accordance with my notes.
I wouldn't say it's a misconception. I mean, the example is from my game, and that's how I find it to be. The details of the character's history and personality that I've committed to (in so much as I commit to anything prior to it coming up in play) definitely steers things towards certain outcomes, or at least certain paths.
For instance, I chose to have the NPC be apprenticed to the same wizard as a PC, and that the NPC ultimately killed that wizard. Certainly, I've just put into play a strong potential for some kind of mission of revenge. Now, I did so knowing (or hoping and expecting) that the player would enjoy that idea. But I benefit from that player being a friend of 30 odd years.
What if I decided that the master wizard had done something to make the NPC apprentice hate him? Maybe he did what he thought he had to do, and is now considered a villain for it? Or.....what if the master wizard hadn't been murdered at all? What if the NPC apprentice balked at the assassination, and then was cursed or damned by the true villain? Those decisions would likely not result in a mission of revenge as readily as what I decided. Maybe then the PC would be looking to save or redeem the NPC? Totally different theme or feeling based entirely on the decision I made as a GM.
And this isn't necessarily good or bad, but it is what happens.
As you go on to say, there could be a myriad of possibilities.....but usually, a couple present themselves as the obvious choices. I think those obvious ones are very dependent on the GM in D&D and similar games. There's less surprise for the GM....less discovery. The more that the GM decides ahead of time, the more things are determined.
I mean, that's one of the main reasons we do so much prep for those games, right? To be prepared.....so that we don't have to make things up on the fly, so that we know what will or at least may happen. The more the GM decides ahead of time, the more things are determined.
Now, that's not to say things are fully predetermined. I feel there's still plenty of room for the players in my D&D game to change things up, and I'll respond accordingly, and maybe a lot will change. Of course that's the case. But I don't know if I'd say the same thing for my Blades game.