If you walk up to that guy with one of your NPCs, you can talk to him without him exploding. He doesn't really say anything that gives any clues as to why he explodes, though.
As for weird moments, here's one I had:
I was playing an evil party, and was tromping through the Shade Lord's lair, when I stumbled upon the imprisoned Mazzy. When I talked to her, I told her that I wasn't going to release her, and that she could rot in prison for all I care. She cursed at me, but I walked away, leaving the door WIDE OPEN. When I came back sometime later (I can't remember why) she was still there! I talked to her again, and she asked me if I had reconsidered releasing her. Face-palming, I gave her my permission to walk through the WIDE OPEN door, and finally she did so, disappearing.
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