I am actually with you in that, my guess is: the ability to click directly on "reply" that goes to a comment with no context would encourage discussion that is less nuanced.

I love the embedding of the comments. I love the ability to click to come to Hacker News and read the whole discussion. I don't love that particular feature though and wish it would be removed.

It's my understanding that keeping a discussion board like this one high quality is a very demanding and delicate task relying on great algorithms and lots of moderator effort.

I could easily envision that feature creating an overload.