@initiator in npc dialogs only works in /execute when used in the first subcommand. In the second, third, etc. subcommand it won't work. This only applies to @initiator and not @s,  @a, etc.

Example:

/execute as @initiator run say hi This command works because @initiator is used in the first subcommand of /execute.

/execute align x as @initiator run say hi This command doesn't work because @initiator isn't in the first subcommand, so the command won't run as the initiator.

Expected behaviour: @initiator should be valid in every execute subcommand

You can see this behaviour in the world attached. Try out the different buttons in the npc dialog.