First it´s bizarre to see an unexpected selection menu at the end of a conversation. The game avoids most of these menus for immersion. and when i see it, this menu breaks immersion.
I will be honest my primary dislike comes from it reminding me of game genre I despise.
On one hand, design wise it makes sense - getting an item that is useless to you could be annoying (though I never felt it), so an ability to choose from free could be handy. At the same time it’s two items you can’t get, so that’s kinda sad.
What you mention is a more objective problem - it just doesn’t fit the rest of the game. It’s a very odd gamey addition, in a game that tends to overproduce everything. It’s especially jarring they added unique UI for it, while common QoL features like party management are missing. The instance you quotes is the only moment I can recall where this system is used, making it even more alien. I think if it had a narrative set up “I have couple cool item, you can pick one if you do this job for me” it could work just fine, though I would prefer in engine implementation - put all items out and remove “owned” status till you pick one of them. You know, use systems you established already.
