Okay, I figured it out! The problem is the order mev_pause_items_use_actually_use does things (looks like something has changed in how Game Maker processes the Create event so the dialogue box taking top priority doesn't work now), rearranging it so we destroy the daddy menus before we spawn the dialogue box fixes the glitch:
(for this to work we need to get a reference to daddy.daddy first before we destroy this menu and its parent, otherwise we can't refer to it later - this is what new variable dd is for)