Or so it seems to be, anyway. I ran through this quest on the initial release without any hitches, taking the pacifist route of sneaking through the caves to enter Buzzer's shop. I let the Mindreader do his thing and then him and his buddies left without any issues.
I did the same thing on my next run, going through as a psion this time. Doing so seems to break the conversation chain. As it progresses I get a blurb about my talents in thought control letting me figure out what he was up to during the process, but at that point the conversation ends and the Mindreader returns to wandering the shop as if I wasn't there. Talking to him again restarts the conversation at the part where his claw grips your forehead to begin the interrogation, but then as soon as it gets back to the thought control part (the next in line), it ends again. Prematurely, I suspect.
This is on the latest version if that's any help, 1.0.0.6. A screenshot of the part it ends on can be found here:
http://i.imgur.com/PKjf1ON.jpg
