As you’ve collectively and correctly concluded, after the most recent IPG update this is now a case of Tournament Error – Insufficient Shuffling, which is accompanied by a warning. Agnes is expected to present her deck to her opponent to allow for further randomization. Not doing so opens up the possibility for manipulating the deck to her advantage, especially in situations like this where the top of the library will be immediately interacted with.

As far as the fix is concerned, the IPG tells us to shuffle the random portion of the library. As Agnes just used a Bloodstained Mire, this is the entire deck. Instruct her to re-shuffle the deck (including the seven cards she revealed), present it to Ned for his opportunity for randomization, and then proceed to correctly resolving the Talent of the Telepath.