Yes, this was available back in live too. (Personally I bind it to 'v'.) It's a little buggy (and was back then too) - sometimes you have to press the key multiple times to toggle it.
Are you aware this item can be controlled via Options? I always set it to forget it, slide both to 50 or whatever.
Yes. However, I don't want to auto-accept the choice. There's a lot of times when this will get me killed - like I'm in, say, Talos in my 20s, I accept an invite from a teens in Steel Canyon, and now all the mobs are vivid purple.
There's really no reason that this prompt shouldn't follow dialogyes/dialogno.