This ability gets used a little too much as an ‘I win’ button in my group. Any advice how to mitigate its potency?

That's the one that damaging Empathy, right? Give the various NPCs, a point or two in the Insight skill.

Also, keep in mind that rendering a character Broken in Empathy, or even just defeating them in a Social Conflict, may result in the said character choosing to physically attack their opponent.

Next time the savage orator in your party tries to verbally brutalize some buff NPCs into submission, consider that smashing their face into a pulp is a valid counter-argument.

Also, keep in mind that rendering a character Broken in Empathy, or even just defeating them in a Social Conflict, may result in the said character choosing to physically attack their opponent.

Next time the savage orator in your party tries to verbally brutalize some buff NPCs into submission, consider that smashing their face into a pulp is a valid counter-argument.

Yup, that was my thought too - but aren’t characters ‘incapacitated’ when reduced to 0 for Empathy?

Incapacitated is a strong word. A broken character is "put out of action" but it can differ slightly from attribute to attribute. For Empathy the rules say:

"You break down in despair or self-pity. You must either explode in a violent outburst, kicking and breaking everything around you, or withdraw from everyone around you."

This mean that someone that is broken in Empathy can go nuts. What this means in gameplay will vary from one situation to another but it can mean that the "bullied" will try to kicking and breaking the source of his misery, namely the "bully". If we purely looking at rule, I could in such a situation rule that the character is allowed to kick the "target" for his despair or self-pity in an uncontrolled way, meaning attacking, throwing vases, etc. but no dodging or parrying (i.e no tactical combat, pure rage).