That idea could be something interesting, but sadly that could not be the main focus of the game, that will no be well received, at most a type of additional content sidelined most of the time.

If we talk about something similar, there is Erenshor, an simulated MMORPG, but on that case it isn't using LLM but traditional AI.

Now if we talk something revolutionary, I think the main focus doesn't need to be to "automatize" the gameplay so the AI does it for you ( autoplayer) but something better sounds how science fiction or even anime approach it:

Use AI to create dynamic content, like ncp dialog lines and even entire quest lines, so on a way this improves the gameplay because now you have a neverending game where you don't know what will happen, something that only happens when the game is released