If we were in a table top session - the GM would ask - "what you want to do?" And then players decided what exactly by group or each member would do what (s)he wants in turn based fashion.
Now lets imagine we doing same thing but in videogame. No one holds players, they can go immediately whenever they want discussing things on the fly and talking with NPC without consulting with group or Game Master.
That leads can quickly lead to a broken table top experience because the Game Master has lost control and can't follow 4 players simultaneously.
To come closer to your case - if you have 3 players in 3 different dialogs - the GM would need to be able to roleplay all of them in the same time.
Imagine if a players wants to say something else what is not in dialog and at the same time 4th person is attacking a guard who is set to patroling area?
Those scenarios are more suited to a standalone adventure as a GM would not be able to roleplay and manage the game anymore.
Iagine having a guard patrolling the area - how it should react if for example player spawned wall of barrels on his way? Should he just avoid it, or feel suspicious about that and start investigating?
The GM has to roleplay this, and Ai could then easily hinder the GM by visually doing something else.
In a tabletop session if the GM says "the market streets bursts with activity, people go by, kids run around, the merchants yell the wonders of their products yaddayaddayadda..."
We could create that market street in the editor, we could place the npcs in the game master mode, but automation can be useful for a GM to a certain point. We could do a loop (breakable any time when the gm possess an npc) of the customers that just move around from one shop to another, goes to point A (fruit shop, f.ex), then spawns a talk emote, waits a couple of seconds, goes to point b (fish shop) when you do that with a dozen npcs suddenly you have a realistic belieavable medieval marketplace, instead of a bunch of static, silent characters just looking ahead. GM could possess any of them at any time and make them talk, but he can create such a scene if he doesn't have the tools.
Hmm... I don't see what you mean by Item Creator. We have pre-defined items in the Monsters and Items panel (works same as spawning NPCs but you also can drag it directly from panel into inventories) and we have the Item generator. The Item generator allows you to quickly create randomized items you want with a pre-set rarity and level scaling. If you want to some in-depth managing - as with a character - with right click - you set and manage almost all properties items have.
Maybe it wasn't really well explained. In GM mode you can create f ex a sword based on another sword's template, you can name it, put its properties and rarity and stuff, but there's no preview of the item in that menu, you can't see how does the sword looks until you equip to an NPC, also you can only create new swords from the pre-existing ones, the ideal move would be a window that let you choose type of weapon, then shows you the models you have available (from main game and mods), you pick the one you like and from there it would be the same, it sounds syupid, but it's a game changer for things like armor, to be able to see how an armor that the players might find will look in GM Mode is no small deal imho.
As Kevin showed, you can create and manage encounters via encounter panel. The button is on the GM tools panel. From there you can set encounter level, encounter alignment, follow current state of HP and armor (press + for that), drag NPC between encounters, rename them,... You can also drag monsters into the encounter from the Monsters and Items panel or select an encounter by clicking on it and spawning monsters on the ground - they will be automatically added to encounter getting its alignment. You also can "deactivate" an encounter - that way you can disable all creatures in it (helps for ambushes). Use right mouse click to access those options.
For NPCs - you can spawn one from the Monsters and Items panel and then fully manage it via right-click and selecting "manage".
In the "appearance" tab you can alter their appearance. Not all NPCs have th same options though, these are defined by the visual sets made in the editor.
Absence of wizards - I understand. But Game Master mode aims to allow you create things based on the templates you have in a fast manner, keeping your game flowing. If you want the full power of customizing these templates - you need to use Editor because this is where the data comes from. As I said Game Master is not a toolset to build standalone campaigns. It is a set of tools allowing you to visualize you tabletop experience.
By difficulty it's meant a calculator of the encounter dificulty. It's impossible for a GM to know exactly all the skills, powers and strength of all the monsters (apart from it¡s level) so it would be VERY useful to see in the encounter menu a calculator based on the player's gear and level to see if it was an easy, normal, hard, almost impossible or certain death encounter, so the gm can buff or nerf monsters on the fly.
By wizards, Yes, everything is made out of copies from the editors data, a blank template or a quicker way to edit, preview and save those copies would be very nice.