Yea, you have interaction and they do acknowledge you exist but that's about it, At most your character is just there to be a quest doer, Your impact in the story is so minimal you can't even go and save a dude getting stabbed right in front of you. Which has happened multiple times. Seriously I hate taking L's I know my character has 100% the ability to prevent and Octopath is just doing that in almost every arc.