As to automated systems, I agree to an extent, that coded systems do not represent all possibilities and cannot. As I noted a little further up on TSOSmud the accepted method of player conflict was collaborative emote/pose with a staff judge if one was needed or coded combat if that was choosen. I staffed on such a game for 10 years and while I believe coded systems can add to the experience and immersion I do not think they are always the best first choice options.
Does coded systems limit imagination? Perhaps it could. I have never personally felt myself limited by coded systems and my imagination. If I need to do something beyond the coded system, I do it. They are there as a base foundation (in my opinion) and not an end all be all.
Example from Armageddon MUD - Disgraced Bard wants to cut himself because his wife died. He opts to slit a wrist and I can easily wish up to staff and ask to be set with a declining HP. This provides a clock by which I will die at the end. That isn't technically code supported but it can be setup. Conversely I could just RP the entire thing out, quit, and send in a request to have my character stored or killed to represent the culmination of my roleplay.
I should also note (again) that Otherspace has space travel and crafting coded. That is it. It qualifies for our "automated systems" requirement to be listed. So when I am discussing coded support and automated systems I don't mean combat has to be automated per se. I personally like it being automated and we are doing it for Project Redshift: Read Senior Dev Jaunt Discuss Immersive Combat Design
I already typed all that up before your edit so I will leave it in....
Character story benefits from strong willed and creative players who are able to tell those stories without the benefit of an external influence. I agree. I also agree that the death of one characters in a 2 character relationship could be a huge character development for 1 of them but that's 50% less RP overall.
Sometimes players get scared though. They get overly attached. They become complacent. They need a helping hand. It is here that coded systems can really assist them by giving feedback and stimulus outside their own thoughts which they can seize onto and run with. Oh I made a mistake and a buck gored me... What can I do roleplay wise with this unfortunate turn of evenets? Oh I accidentally bought to many mugs of beer. Hey there's a dude over there, I'll give one to him and chat him up. Oh traveling from this city to the next city over is codedly very dangerous. Let me plan ahead and possibly hire other people to escort me and interact with them.
Could all of it be accomplished without code. You bet! Does having code sometimes help and prompt players into doing things they may not have thought of themselves. I think so.