That does mean your version is "not so fresh". Try the original DLsite's one. Keep in mind MTools permanently modifies most old games; simply running the game without it won't cut it (which is why I usually don't use it).
There's a link in OP to the mod thread, which has links to the mod repository. You also could try the modded version there, pass seems to be "SQ", in capital letters. edit: my mistake, for SQ1 it's "only" their badass mod; it does replace most of the code, so it might work out?
There's almost no way to debug dialogue once it's broken, it involves too many files. The usual culprit (if no mod) is SQ_patch.rb, if that helps.
PS: if you are using a mod, check the options if any, for dialogue length (simple, verbose). Not using full dialogue used to break some intricate events.