The difference is that Dwarf Fortress is not fully opaque to the player. You see a large part of the world so can see the consequences of your actions. And that is what makes it fun.

An opaque world simulator is frustrating and tedious. Eventually someone just min-maxes a way to break it which makes it just a tedious cookie clicker. That's why D&D has a game master that modifies the world's design to align with the players so that everyone has a good time. That is the key difference. An illusion of rigid structure, which requires some actual structure, with opaque flexibility. A simulator is not a fun game. A world where god cheats to make you have more fun time is a fun game. A pre-defined narrative or narrative tress is one such cheat, but not the only one.

I've been in too many conversations where this topic comes up, and it's very disheartening to me. Gamers insist there are plenty of great narrative games, and every example they give is basically a branching story with bunch of flags that gate which branches can be taken. If I give the Holodeck as a counter-example, well that's just too pie-in-the-sky.

These conversations remind me a lot of Paul Graham's Blub Paradox: "Blub is good enough for him, because he thinks in Blub." Current SotA narrative games are good enough for most gamers, because all they've played are branching story games.