It doesn't. She repeats the conversation.
The only way it advances is if the player changes cells or perhaps is a specific distance away from the her. I can't figure out a way around this. Oblivion dd not behave like this. My theory is the package is overriding the stage advancement and simply firing again before the stage advances. If you tab out when she starts the conversation again the stage advances.
As a side note, once stage 31 is set, in stage 31's script fragment that is where the wait is and the advancement to the next conversation at, say, stage 35. That all works correctly.
Any help here is greatly appreciated.