I had a similar experience. The difference is that if I agred to surrender it, then Braccus would reveal himself, and Lucian and Dallis would join my side and the fight would immediately commence. What is more bizarre is that if I REFUSED to surrender my source... then no one would do anything and I could freely wander around. I was forced to force attack Braccus until he went hostile, and then the battle would begin. That makes zero sense, that I would refuse to be purged, and then Lucian and Dallis would say, "Oh, okay. Well, just wander around and do as you wish... and, btw, if you would like to attack our slave... have fun!"
It does seem crazy that you can just ignore Lucian and Dallis and assume divinity if you want... but, I didn't even try to take that option, so don't know what would have happened had I done that.
That's definitely a bug. In my game Dallis pretty much says they'll get me to cooperate by force if necessary and then they attack me. Phase 2 will then trigger once either Rex or Dallis is low enough on health. My main bug in that fight is losing my revered buff if anyone goes upstairs.
