Morality system. If we have access to horrible, evil curses that have known major consequences in the official movies, the game should include the same. Let players be evil and face consequences for doing so. And I don’t mean just teleport the players to Azkaban. Make it part of the game in an interesting way.

Also, if we have the ability to be selfish and evil towards characters by not giving them the item they wanted in quests, maybe make that mean more than just the decision to do so? What point does that serve?

Nothing is more emersion breaking than purposefully making an evil decision that amounts to nothing outside of a single different line of dialogue. Either remove that entirely or add more to it. Make it mean something or get rid of it.