Octavia is a bossy president of a future corp/government with a dominative nature. Either you like it or not, but she's the boss there. Yet, you still can show your independent nature. And after some choices,
Octavia sees this in you, and tells you that she could go easy on you, but you still have to show her respect. Kind of a compromise. That's why MC calls her Madam Octavia, even if you aren't a sub. This is more like an expression of respect, not submission.
At this moment, you can take a route where you are her sub, or refuse it and move towards a dom route where you'll still be able to avoid even that. It's just very hard to consider every choice and route. So think about it like this: There is a main story where Octavia is who she is. Your choices won't affect too much on that. And there are a couple of routes with lewd scenes. Where either sub or dom path will affect on those.
Maybe the scene with Liu and Octavia isn't much about domination, but it's more about Octavia giving you some freedom and testing you.
You may think that this game is all about domination, but that's just because everything revolves around Octavia in the future. It's more than that. And after some character and relationship development, everything will become clearer. You can avoid femdom route, but you can't just change how the things work in this world. Other's will still respect and obey Octavia. Besides, her character is very complicated. It’s gonna take a lot of time to really reveal her character. And I hope, some of you gonna change their impression about her