How to use 3D objects as status symbols for NPCs

Mauschelbaer now you talk about fish and seasoning and treat them like they are both ape species..

FIrst define what you really whant.. Sims diamond thing does not align to the player view as far as i remember.. its just always pointing to sky (vertical).

In any case just make that diamond thing as a separate scene, just add meshinstnace3d and animation tree and anything else you want.. dont add collision..
then on NPC player you instantiate that node and position at the top of the head..

But i guess you already knew how to do all that because you already have NPCs in your game with walking behavior, wich is quite a feat to achieve in game dev

Mauschelbaer Either pre-render and display as 3d sprites, or render realtime in viewports and again display as 3d sprites.

Mauschelbaer always rotates in the direction of the camera

you can use a sprite with billboard.

Mauschelbaer These 3D objects should also have effects, animations and lighting without affecting the "normal" game world.

for my game the outlines were intefering with shadows, so I set them to render_mode depth_draw_never and shadows_disabled these can also be set in the material and MeshInstance3D geometry (read the docs).

Mauschelbaer In a way, like the green diamond in "The Sims". If it glows green, the character shouldn't be illuminated by it, do you know what I mean? What's the best way to do this?

if you want the thing to be affected by lighting but not affect elements of the world... well it won't, that's how 3D works. but for lighting it you can use emission, either from material or custom shader. this is easier with a Sprite3D, where you can animate the frames.