Ok, so it is the Choices&Consequences system.
The most important element, according to Fargo and Urquhart, which define the genre. But...even if there is an amazing C&C system, if quest design is extremely linear and dialogues tree is not deep enough, all the role-playing system is compromizsed. Don't you think?
But actually, you can't.
It's like Gothic, where the non level scaling system is supposed to add more focus in the main quest.
Of course. A game being narrative does not simultaneously means it is an RPG as well. Same with Sanbox. The things that OP described can happen in GTA which is a Sanbox action game, but not an RPG(even though most modern games do include RPG elements). The absense of level scalng makes it hard to free roam, but not artificially, in the style of invisible walls. You can go there, but there is a pretty good chance you will get your ass kicked, but the game does not artifically prevent you. Even in Skyrim, in low levels you would be destroyed by giants or Dragon priests, despite the level scaling.
As what is RPG, you have to go deep in the roots to find the answer, which is Pen and Paper Dungeons and Dragons. To put it simply, is where you have freedom on how you will build and progress your character, but in terms of combat and gear, rather than the actual personality. Of course your choices with a character like Geralt, who is a swordman are somewhat limited, but that's the cases even in Pen and Paper if you play with Drizt do Urden. You can still affect the character "build"(that's the key word).
That's the core of it and then it expands. The closest to this are turn based video games, like Divinity. Then party based RPGs, real time with pause. And then the action interpretation of RPGs where you manually apply your build in real time. But calling a game simply Action RPG does not cut it, because besides the Role Playing elemets(which i tried to explain above, but really to get your answer, look at pen and paper and interpret the term as you want), it does not describe the second major focus of the game. Skyrim, Diablo and the Witcher are all action RPGs, but very different. TW3 will incrorporate all of them, but with the narrative aspect being propably the strongest one.
Update: You can also bring the argument of RPG vs Action RPG. In clasic RPG, be it pen and paper or video game, usually you have the 'team" where each build plays it's 'Role" in order to be successful on your encounters(healers,tanks etc.). In action RPGs you are mostly solo(even though AI companions can be there as well), where you try to do your "build" as good as possible in order to fit your playstyle and be successful. But whatever the RPG label, you have to have a Build.
Over 2 months ago i started a thread asking quetions about the "RPG elements" of the TW3, and all my quetions where related to build creation and leveling up, being a long time RPG player myself, including pen and paper, but i guess many people interpret the term differently nowdays.