Seems like with the current update, the Skip Dialogue is quite broken, although its skipping for sometime and then goes back once you talk again to an npc.
Need more technical details of the problem, "quite broken" doesn't mean anything to us.
I'm having this problem too, but it's not really "broken" per say, just that when you zone in a new area, it doesn't seem to work until I reload modules. Then it works fine, but I have to reload again on another zone-in.
^ my bad, yep what he said.
found the issue, will be fixed shortly