Looks like everything's good now. You HOPE it's all good, at least.
The guard-- err, Kotori, that's what she said her name was, right?? Anyway, Kotori doesn't seem on the verge of ending your entire bloodline, as opposed to how she was before.
You gain +3 Diplomacy points.
entire bloodline = Nino may be an only child. But he's featured having parents and then being in an orphanage, could be the flower haze.
tl;dr: Nino hesitantly ends the encounter, since Kotori is no longer trying to kill him.