The more I think about it the less I find this gossip system being possible, other than as preconstructed sentences based on events in your character's life. I don't think you could make the npc ai smart enough to register a sentence a player types out and then take that information and form their own sentences to tell other npc or players.
The best I could hope for is it registers key words strung together and then repeat a default sentence like "I heard that (player name/beast/npc) (killed/helped/found) (the king/farmer bob/an ancient artifact)." Anything more complex seems beyond what ai is capable of in video games.
I honestly expected communication with npcs in CoE to be similar to how it worked in EQ where you would have to use the highlighted word in your own sentence to trigger the next line of dialogue from the npc, except that the word wouldn't be highlighted. So if they mention their dog is missing and then you say something with the word dog in it they would start telling you about their missing dog and where they last saw it, creating a quest opportunity.
I'm starting to think it will be even more difficult to have communication with npcs affecting fame of players because of how limited its capabilities will be.