Mouse Cursor Mode Attacks NPC

In Solace Bridge, I hit control to get out of the reticle and get mouse cursor mode. I then clicked on the wandering traveler at the end of the scene. Instead of starting a dialog with the wandering traveler, my character attacked him (or was aiming at the daisies over his shoulder) in mouse cursor mode. I'm confused on how to converse with an NPC guest giver if both the reticle and mouse cursor mode attack.

 

Were you still in combat mode? Messages would typically appear on the screen when attempting to interact with an NPC while in combat mode along the lines of the NPC being "wary" and the sheath your weapon before talking to them via Z. Admittedly, you shouldn't still be firing when trying to select an interactive target (the same issue can be scene with corpses).