On the Nose

In fumbling through our interpersonal relationships, humans rarely say exactly what we mean. This isn't necessarily about deception, but rather about the nuances of communication. Because this is what we're used to, it's particularly jarring when fictional characters carry on extended conversations where each says exactly what's on their mind. So much so that such scenes tend to read as though the characters are intentionally lying to each other. Unless your characters have a reason for speaking this way-- maybe they're communicating across a language barrier, or are autistic, for example-- you should try to make their dialogue less 'on the nose'.

Fictional dialogue may be the cleaned-up version of natural speech-- for example, it's generally best to avoid all the filler words and mundane chitchat we regularly use and get to the 'good bits' of the dialogue-- but it does need to sound like natural speech. A lot of the time, actually, natural speech means not speaking at all, or not saying something. For example:
Not stating the obvious. In general, we don't reiterate information which we understand to be shared knowledge, or that seems self-evident to everyone present. If you can't say something nice... People generally tend to bite their tongues on unflattering comments unless they're totally sure they can afford to anger the target, or that the target won't hear. Other inappropriate commentary. Some comments are just not appropriate for work, dinner, or generally offensive. We all have these thoughts, but have been taught to refrain from sharing. Body language covered it. Much of human communication is nonverbal, so no need to state the obvious when your movements and facial expression is talking. If you keep those in mind, this should help your dialogue flow more naturally, even when characters aren't holding things back on purpose.