From the original description in the Grandia II recap:
I think this may be the first instance (at least in my particular game) where I have the 'opportunity' to select each of the three characters, over and over, in random order, to carry out a fun dinner conversation. Since I don't feel like describing this particular event every time it happens in the game, I'm just going to name it ChoadChat. If I had to make a wild guess, I would say that the game designers intended ChoadChat to be a more natural, interactive way of having the characters converse. Unfortunately, the dialogue ends up being extremely repetitive and, of course, pointless. Imagine that.
In general, Choad Chat is used to describe any kind of stilted, forced conversation between characters. More broadly still, it means a pointless conversation we are forced to recap for the sake of completeness, making us hate ourselves.
Examples
The happy music lulls me into a false sense of security, only to spring another freaking ChoadChat on me. The group sits around the table, and the main "point" of this completely pointless scene is so that we can see the group's reaction to eating reproductive organs. Kind of like watching Fear Factor, except with shittier dialogue. I think. Tidink practically chokes on his portion of the wombat schlong, bitching about how disgusting it tastes. I think we've run into the first male video game character to complain about having a penis in his mouth. - Grandia II Part 3