It's not called "Radiant" because it's supposed to be bright.

[b"Radiant A.I. is the dynamic reaction to the player's actions by both NPCs and the game world in Skyrim.
The use of Radiant A.I. crafts a more personal and unpredictable experience for players by tailoring the world in response to the player's past actions and experiences. For example, Radiant A.I. may be used to set a quest objective in a location previously undiscovered by the player and populate that location with enemies who suit the players abilities or detail NPC reactions and behaviours based on past actions.
Radiant A.I. technology has been used (although to a lesser extent) in one other Elder Scrolls game: The Elder Scrolls IV: Oblivion. It has also been used in other Role-Playing games from Bethesda such as Fallout 3 and Fallout: New Vegas, in which the two expanded onto it, and gave the developers the idea to expand it fully in Skyrim, but to an extent; there is never a case where the player is unable to do something because of the player character's race, class (or strong skills, in the case of Elder Scrolls: Skyrim) or birthsign.][/b]
Radiant AI is not "the dynamic reaction to the player's actions." It controls what NPCs (including creatures) do, not just how they react to the player. Beyond controlling those NPCs, it has nothing to do with the game world. Radiant Story is the tool used for making and conditionalizing quests. The game builds a database of the player's actions and experiences. Through Radiant Story, a developer can place conditional checks on that stored information and have the game world respond to it.
Is AI really a misnomer? AI already means it's not real intelligence. Simulated AI seems redundant to me. Sort of like pretend fake intelligence.
Ideally, artificial intelligence is real intelligence, only man-made. In practice, it is generally accepted that AI is not real intelligence.