Thanks for the responses, including from Kyle himself. I meant to reply to MeBID earlier, your post gave me some good food for thought. I've actually been skimming through last year's stream to see how different games integrated DSD.
A game without combat wasn't really an active goal of mine, I was more worried about setting up enemy AI in 3D space. After prototyping some ideas, I found implementing what I know about steering behaviors isn't really different in 3D especially combined with Unity's built-in character controller. It only took a few minutes to get an enemy smoothly chasing Charlene across slopey terrain and slow down on arrival. I do have one interesting idea for a battle system that I sort of want to explore.
I've got a small video of Charlene running around an environment I made to get a feel for the terrain tools with the enemy following. Since asset packs are okay, I'm using animations from Mixamo's free library. Charlene's run is looking cute.