They want to know if the Laws apply to psychic abilities (Specifically Domination and reading thoughts) that are not spells but, by their definition, "something a psychic could do". They are arguing that Domination isn't strictly a Magic Spell, therefore it isn't in the purview of the Council.
This person specifically said there's no proof the Council polices Minor Talents, because "Minor talents are described as those with diluted supernatural bloodlines or items of power that grant them one or two supernatural abilities. Not spellcasting."
First thing to decide, are we discussing law or Law? Capital Law, as in the metaphysical effect of an action is the more difficult of the two to discuss. It's largely dependent on group and how they interpret things. My interpretation is a human (non-vampire) using Domination on another human breaks the Law and earns him a Lawbreaker stunt. Whether the power is described as psychic, magic, or something else isn't important. The enslavement, even temporarily, of another is the issue. But there's really no wrong answer here...the previous is just my interpretation.
Enforcement of law by Wardens is another matter. Much will depend on the Warden in question. We already know they see everything (or nearly) as 'magic' even if the werewolf in question states otherwise. So the real question becomes, how does the Warden feel about the individual, the law, and killing? Is he a Morgan who thinks chopping heads is the best solution for any crossing of the line? Or does he have a grayer outlook on life?
In the long run, a wizard or warden will do whatever he thinks best. If the character isn't part of a recognized faction, he'd probably better avoid being seen to break a Law...even if immune from the metaphysical effects. If he is part of a faction, the warden might actually hesitate before chopping and courting war...unless his name is Harry.