Interestingly, I've played a game that did something like this. I can't for the life of me remember what the name of the game was... But I do recall playing a game that had a Journal that was updated as if your character was writing it.
Meaning, it contained entries of events that occurred, as well as what decisions you made in response to them. Sometimes with additional remarks about potential consequences of such responses for example stuff like "Party A and Party B had a dispute. I decided to side with Party B to solve the dispute. I hope that Party A doesn't retaliate in some way..."
It was quite interesting to see the journal actually be used as a journal, rather than just a quest panel.
Meanwhile, codices are quite common, especially ones that adapt to player progression and update as more information is gained in regards to specific characters or factions.
As far as the whole "Turning it into a novel" thing... I dunno how engaging such a novel would end up being, if the goal is to highlight character driven options and to ensure narrative clarity. Would likely end up reading like a toddler's story with "I did this and then I did that and then I did this and then I did that and then I did this and then..."
If they can add it, then go for it. I'm just skeptical as to how popular it would be (Especially if it used Gen AI to aid with it... Larian already got slammed hard by backlash for use of AI for concept art and placeholder text. I'm not sure they're keen to take another round of backlash for using it for an actual end product)
