Yes, dual dialogs are on. That's why we're confused as to why we didn't get a dialog to chose what to do. There was one right after talking to Zandalor, but it seemed more like each of us voicing our opinion. I picked the option that was something about not being able to forget how many people Leandra killed, and my friend agreed. My friend had the soul forge ritual with him, but when we defeated Leandra, the dialog options were only "click to continue" and it forged them without giving us a choice.

We loaded a save farther back and this time we didn't speak to the vendor. Instead, we went past him until it triggered the auto save, then made a manual save and went back to trade with him. The sister's followed us to the battle this time, but Leandra never took control during the void dragon battle. After the battle was over, the sister's "poofed" and turned into Icara with the same dialog as before about killing Leandra.