I think something that would give a lot of personality and make the characters more lively is rotating the head in the direction the player is facing (at least in the up and down Z axis, since we already match the direction in the XY pane).
Can this be guided by animations in the 3D model or is it entirely the engine's work (would it have to render head and torso as separate models)? It would be nice if this was doable as an additive animation so that we can have simultaneously idle breathing movement in the head and rotation (according to
the blender forum it is possible to do that in blender's
Non-Linear Animator, would minetest engine format support it?).
By the looks of the 3rd person view, the camera is already centered in the head, so just rotating the head over its center would work (maybe curve a little bit the chest as well to try to avoid too much collision on extreme angles, without changing the center of the head). However, there should be a maximum and minimum angle, otherwise it would look very strange when looking completely up or completely down.