Yes this is correct. There is a bug in the game (of course) for starting the PussyFights tournament. If you completed Tyna's quest entirely before this update, meaning you returned to Amaria and watched the scene of her thanking you, the Tyna quest variable is set to 20. However, in this new version it must be set to 17 to continue. The man in blue standing next to Tyna is essentially the same as the cat's that BON put in for previous versions to fix variables when coming from an older save. When you speak to him he will reset Tyna quest to 17 and some other switches so when you talk to Tyna you will continue. Otheriwise Tyna won't advance the quest.