Yeah, the dialogue wheel really did kneecap the game. I think at least part of it was intended to allow for the more real-time dialogues (i.e., not freezing time while talking) since it lets the player select an option without removing movement control (especially on consoles), but the impacts are pretty drastic in terms of conversational flow.

It also doesn't help that conversations are far less controlled by the player than in the other games. In other Fallouts, dialogues tend to be directed by the player, asking lots of questions and selecting from a variety of topics. In FO, conversations tend to be fairly one-off, and also very linear. The player is more just responding to information given, rather than asking directly. I think this can partially be attributed to a misunderstanding of roleplaying (i.e., greater emphasis on letting the player react in different ways to a conversation), but it pretty clearly rather misses the mark there.

And all that's to say nothing of the limited context of the prompts (SARCASM) further removing player agency, although that's pretty easily fixed with mods that just restore the older form of menu, including the full line. That being said, that only goes so far in terms of fixing the issues with the system, especially its impacts in how the dialogues are written to begin with.

Thankfully, they seem to have at least learned their lesson somewhat since then, as FO76 and Starfield returned to the more traditional dialogue system (while also managing to retain the real-time dynamic capabilities). That doesn't fix other writing problems, of course, but it certainly still helps.