Intuitive behaviour in gamers

Last time I mentioned that I've started playing D&D with my kids. They're junior school age and have never played any games like this before. And that's why it's been interesting to see the following behaviours in their game style.

They add story elements by themselves.
It's not just a request, they just narrate it in. They want a dragon? There's a dragon somewhere. They want an annual festival where the fleet comes in to harbour? There's a festival. So many games have rules for this, but my kids do it intuitively. They don't expect an in-game reward but they get the emotional reward.

They allow fleeing opponents to flee.
Even though it's D&D, not every encounter has to end in total death. When the creature gets to low hit points or is the last in the party I make a Wisdom check to see if the creature is smart enough to flee. There's usually the opportunity for our heroes to shoot it in the back as it does so. However, they don't. "Go in peace!" one said. When the other one decided to take the shot he was met with, "No, let it go..."

Wanting to build, not just kill & loot.
Several episodes were spent trying to rebuild a village that was destroyed by rampaging monsters. (Incidentally, every village has a magic Village Crystal that sustains the village. Their idea, not mine.) Once the crystal was returned and buried, the village started to regrow. So many details came forward. The windmill doesn't mill things, it harnesses magic energy that powers the village street lamps. Again, not my idea.

No "murder-hobo" instinct.
Despite the reputation of D&D, I'm not seeing the game create this behaviour just yet. My kids are just playing. They're making their own stories in a D&D world. Sometimes that's fighting monsters. Sometimes that's working with the blacksmith to make a magic pet house for the familiar cat. Sometimes it's making a performance check to see if their story was the most interesting at the feast.

I've learnt a lot about D&D and about story games just by being a DM for them. System matters, but not as much as player agency, it seems.