dada one day you and me are going to talk forever about how surprisingly well written FFVIII was.
that segment in particular is great because it combines a different reflection on his background in terms of julia and some interesting foreshadowing, not only in his timeline of ellone's kidnapping, leading to laguna leaving winhill, eventually staying in esthar and raine dying in childbirth without him (ellone and the newborn squall ending up at the orphanage!) but also to a lesser extent squall potentially losing his friends on the missile base mission, which is the immediate point of reference, but mostly rinoa's coma and squall's sudden realisation of his feelings for her and his eventual breakdown (resulting in his travelling to esthar and eventually being reunited with ellone and his father! talk about bookends)
of course, it would've helped if they'd put most of that in the game save for three NPC dialogues that blow it wide open
EDIT: more niggling thoughts - that particular dialogue is particularly interesting in that it sets up a clear contrast in personalities between laguna and squall. laguna is very open with his feelings and talks about his fear of losing ellone and raine with kiros (sadly for him, his worst fears come true - "if you talk about bad things, they'll come true" shit i never picked up on that before). squall bottles up his feelings, and when it comes down to it and rinoa goes into a coma he regrets never having expressed his feelings for her properly before, which is what drives him to the edge. the two different personalities end up causing both of them a lot of heartache, but for different reasons.