I tried this out and it was a huge improvement. I played this last year on the steam deck and as you can imagine the text is quite small there. Wish I had knew about this then. I was thinking of uploading this as a mod to help out others. I hope you're okay with that? I'll be sure to leave credit of course.
There is one problem though and it is the one you mentioned. I only wanted to increase the font size in dialogue but end up increasing the font size in banters and scripted interactions too. Do you know if there is an easy way to differentiate them in the files?
It seemed as if the file names gave some indication of the type. File names with "bs_" seem to be banters, "si_" scripted interactions and "cv_" for conversations but there can be lines of banter inside of conversation files(from what I can tell this happens with named npcs) and in the example you used with the Pallid Knight, that file is named "si_" despite being a conversation in a dialogue box. The usher you meet in the prologue also has the file name "21_bs_usher" despite also being a conversation in a dialogue box. I'm hoping the prologue is just some kind of weird exception, but even disregarding those two, the issue is with banters inside of cv_ files as those are harder to narrow down. I guess it isn't that big of a deal but I would have preferred to have left the banters unmodified if possible.
I couldn't find the thread you were referring to. Is someone already working on larger font mod? If not, I can try to upload mine later.