I just took a look at my physical copy and figured this out, so I'll give a bit more of an explanation:
When you start the game, behind each fief is a total of 20 stars/points. A Gold win is 20 points, Silver is 18, and Bronze is 16. For 0 thru 7, points are laid out as 4-3-2-1-1-2-3-4.
So, Scenario time: It's a new game and you visit the first fief in line, over the zero. That one is worth 4 points. You play out the dialogue, and lose. So that is 4 points gone. Now even if you win the rest, you can only get 16 points(Bronze). If you lose again, that would mean you're no longer able to get a winning score. You continue, and you lose again. Now when the game asks if you want to continue, if you press continue, the game will reset because you can no longer win.
Scenario 2 - another pair of failures, but this time you lose to the ones over #3, and #4. Those are both only worth 1 star. Losing to those only lost you 2 points, and you could still get a Silver or Bronze score. So the game will continue on as normal but the only ones left are 2+ stars. If the next one you visit is worth 2, and you lose, you'll exhaust all points you are able to lose. You'll need to win all the rest of your dialogues to win the game with a Bronze score. If you don't, then the game will reset when you press Continue, because you can no longer get a winning score.
