Yep, it's fix now. With Brendan, your life just drop a little and you have a "normal" malfunction.
But here, there are "pillars" around the bathtub (we can see them at 5:24 on the video), and when you are between them, you take electrical damage (and malfunction HUD) when the fight begin. The psycho apply fire damage with her mantis blade (you can see them "burn" on your screenshot above).
Edit :
Besides we can see very well the electric "pillars" on your screenshot too
But yes, that's strange that relic malfunction still persist "infinitely"...