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I did a fresh install and started a new game. I believe the bug is still happening.

My EXACT path:

-Game was installed/extracted to my downloads folder. No CS1 carry-over

-Whole game played in windowed mode, all sound settings at 20%, always dash is on. All dialogue is progressed with "X"

-Went straight to the hotel, got the part, went to the hideout. Walked to the east exit of city.

-Started again at the west side of the city - ran to the hideout, had the backstory explanation. Picked up items in the trunk and fridge.

-Proceeded through the desert area killing every single enemy. Every fight started with a hard knocks followed by regular attack to finish enemies. After every fight, I restored my health with Patch Up

-Go to the ambush with 5 enemies near the odd-looking statue. Killed them. I used 1 hamburger during the fight.

-Pick up the disk, which started the cutscene.

-Talked with Mahir, when he offered me to fight, I said "nevermind"

-Went straight to the porn shop, went through the cutscenes in there.

-Entered entertainment district 1. Got the ambush by 5 enemies. At this point there are no hypno scenes. Every enemy attack is double slash. Winning this fight got me level 12

-Fought through several more enemies, no special events in combat. To additionally test. I would narrow a fight down to one enemy, and just spam guard until something else happened. Nothing ever did.

I could further verify by going all the way to the hyena trainers, but it seems like it's still happening

Edit: An update: I tried playing through exactly like this on 0.5.2, and the bug is no longer there. I noticed in 0.5.2, you are required to go back to mahir after the porn shop scene. In 0.5.5, this isn't the case. You can just leave the city immediately after the porn shop. This is probably whats causing the bug.

my only difference to your path was that I did not fight mahir. I saved before, saw the fight was difficult, then loaded my previous save and walked out of the hideout

I'll probably just try to start a fresh save to see if it replicates. It's something that happened at all points in the game

Further, ever single enemy will only double slash. Maybe one in every hundred attacks will be that they put me in a "dazed" state, but then they just keep attacking

I am almost through most of the game and I have to imagine I'm experiencing a bug. There are no hypno scenes or anything related to that in every single combat scene. The hyena trainers just sit still in battle and don't do anything. I'm aware there's a "good luck charm" that maybe is supposed to put me in this state, but I've never acquired/used it.