I ran into this, but after some head scratching I realized the game wanted me to assign an unused mutagen.
I have the same problem. I tried restarting and I tried leveling up different skills and the problem still persists. The game is stuck at the 'press c to spend all talent points' instruction. The game also mentioned something about mutagens before, but I can't use any, because I don't have any (there was none in the chest and there are no enemy bodies to loot).
Another thing I noticed: when meditating before entering the arena, the screen shows that Geralt is level one. After the fights when leveling up, the level is shown as 8, but one has only one talent point to spend. Perhaps that is the problem? That the game expects you to spend several talent points when you have only one?
Well, whatever the problem is, please fix it!