I guess my take on this is... if NPC interaction is free and equally spread, and any sort of interaction with them, be it mundane, sexually charged, or plot-related, is not limited to only a few players/characters, then so what. Where I run into a wall is when NPCs are falling into multiple frequent interactions with the same players/characters, when it is evident that their interactions with those players/characters is radically different (more invested/more interesting/more in-depth/more rewarding) with a tiny pool of players/characters, and when that interaction sets up other players/characters to be audience only without the possibility of breaking through to more involved interactions.
If I see an NPC in multiple scenes with the same people over the course of a period of time, handing out shinies of whatever variety to one or two people, and I am putting in the same level of effort but not getting the same level of return, then yeah... that's a shitty feeling, a shitty situation, and probably not a game I am going to stick around on. I have walked away from games for that. I will walk away from games if I'm in that situation again. It's something I'm wrestling with right now, in fact.
The shape of the interaction with the NPCs doesn't matter to me. What matters is the atmosphere created by those interactions, if it feels like a level playing ground. When it doesn't (and I acknowledge there will be times it doesn't feel level without there being actual staff misconduct), no amount of railing by the players is going to change staff's approach to it (because people on any side of an argument will find justifications to shore up their side of things). Your option then is to vote with your feet.
It isn't a matter of knowing it when I see it. For me, I know it when I feel it, and when I do feel it I'm generally not long for that game.