Could anyone specify what are the advantages of third-person dialogues? And why first-person dialogues would require multiple variants of lines?
To me, third-person lines are extremely immersion-breaking because they create excessive abstraction without a just purpose, therefore increasing a distance between a player and what is happening in the game.
Second, It is more practical to know what exactly my character says.

For the same reason people don't use third-person expression in table-top rpgs.