She immediately stated I seeked affection from someone else even though I have not been remotely romantic to anyone else this run except her.
Hello! There is currently an approval bug with Minthara where she will accuse of you cheating when you reach 70+ approval points. This is likely what happened after that pickpocket dialogue. Larian hasn't fixed it yet and this bug doesn't seem to happen for everyone. Around a week ago, I found a Reddit thread highlighting the same issue. Maybe it can help you. I strongly advise you to submit a bug report to Larian anyway to help them out, and be sure to attach your save file if it is unmodded.
As for continuing or not, it's up to you. There isn't much content for Minthara to begin with in terms of romance, so you won't lose out on much. If you don't want to wait for a fix, I'd suggest using Script Extender to re-set her flags.
