Man, this is the second time this series has resonated with me. Character growth makes the game worth playing. For me, the best character development I have participated in came from our pathfinder kingmaker campaign. We started with six level one characters; a ranger, an alchemist, a paladin, a loreacle, and a spellblade, with a barbarian joining later. We all had different starting points.
The ranger was taciturn, gruff and had OCD. It took them twice as long to track, and since so much of the early campaign starts with exploration, this led to frustration with the party as a slower pace meant missed opportunities. The character was pushed to a breaking point, and was able to perform at normal speed (the flaw was bought off), but it left them slightly unhinged and a few points closer toward neutral. We also had a character leave part way through the campaign and had to resolve that situation by having them take a passive role and bringing on a dumb-as-bricks barbarian. Our paladin almost died in our first encounter, taking a critical arrow through the neck and was overly cautious thereafter, as well as little indecisive. Our Oracle started blind, became the butt of many jokes, but was able to divine almost all the answers we needed and we grew to respect them. Our alchemist's solution to everything was "bomb arrow" but they learned a modicum of diplomacy after enough splash damage had been handed out. We didn't have arcs so much as complex functions graphed out into strange non-euclidean shapes. We grew in multiple directions but usually headed towards the same goal. We shaped each other as much we did ourselves.
By the end of the campaign, we were no longer a ragtag group of heroes, we were the leaders of a nation. We had seen war and plague, we had been tested with the tough decisions, internal conflict, and external threats faced by many nations in history. Our responses to those threats were informed by our growth and in turn changed us so that each new choice was the product of our journey. To me what makes kingmaker so much better than most campaigns is that not only do you write narratives of character's lives, you also write the history of a nation which is character narrative writ large. The overarching story is so broad you can almost make it anything, it reminds me of elder scrolls in that regard. The world shapes you and you shape the world.