It’s like the designers just wanted to establish that Piero was a creep, and it didn’t occur to them that the players would want to respond in some way. Once you catch him spying on Callista in the bath, you’re forced into a conversation with him. But you can’t really do anything.
You can’t blackmail him, even though he has something you need. You can’t wait until later and tell Callista that she ought to watch out for this sort of thing. (I talked to her later and didn’t get the option. I don’t know what your dialog options are if you barge into the bathroom.) You can’t even tell anyone else about the situation.
Even if you didn’t want to script a branching sidequest where the player might blackmail Piero and also might optionally betray him later once they get what they want, there’s still so much you can do with this setup. Just letting the player ineffectually tell people would make for interesting character development. Maybe Pendleton would think it’s just the most delicious gossip that such a brilliant man is taken to such base behavior. Maybe Havelock doesn’t like it because it shows Piero lacks discipline. Martin would be offended by the immorality of it and see it as a religious problem. Maybe all of them would urge you against taking action now, suggesting that they’ll deal with Piero once you kill the bad guy. There: A tiny sip of characterization, the illusion of player choice, and a foreshadowing of the coming twist.
Like the torture, like your alleged fatherhood of Emily, and like your supposed relationship with the late Empress, this is an interesting set-up with no delivery. This is why the game often felt so detached and emotionally vacant to me. The gameplay is fun, but even the characters themselves don’t seem to care about what’s going on.
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