Anyway, unfortunately I couldn't manage to make this bug go away, but you can go around it by leaving a party member behind in a different area before talking to the queen and Isbeil, then when Isbeil finishes her dialog and stops progressing the scene, have that character teleport in using a pyramid. This will interrupt the scene and Isbeil won't like that, so she will initiate combat.
Thanks for taking the time to try and figure out what was going on! I was resigned to just initiating combat with Isbeil before she starts the conversation but I like your idea of porting in a character from outside the event instead. Hopefully that will continue the quest correctly from that point.
