I agree with Kripple707 - this isn't much of a visual novel engine without layers, or at least the ability to show characters against a separate background. It's all very promising, but it needs more work. Take a look at https://headkanon.com/ for inspiration...

So, is this project dead?

EDIT: As the original question is now nearly a year old, and no developments seem forthcoming, I'd guess this is an ex-project. It is no more, It has gone to meet its maker.