Your completely correct about the error. It is a simple fix for devs unfortunately nothing can be done with your current game.
<QuestObjectiveDef>
<ObjectiveID>2</ObjectiveID>
<NextObjectiveID>3</NextObjectiveID>
<PopupObjectiveMsg>0</PopupObjectiveMsg>
...
<QuestChoiceDef>
<Description>I'll come back later</Description>
<NextObjectiveID>3</NextObjectiveID>
</QuestChoiceDef>
</QuestObjectiveDef>
The bolded should be
<NextObjectiveID>2</NextObjectiveID>
for you to go back to the quest.
