Not sure if bug or what

But are you supposed to get a Masquerade Violation from using disciplines on the thugs in the Jimmy Reed quest?

I#m not sure what Zer0 intended, but if I recall right, the parking garage is still masquerade area even when you are on the Jimmy Reed quest. And I believe at the time when you do it, usually the cops guarding the closed exit to the pier still are there.

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I turned off the Masquerade flag for the gang members in the garage so NO, you shouldn't receive a Masquerade violation for using disciplines around them. However, if a pedestrian or cop happens to walk by while you're using disciplines, you will still get the violation from them.

Not sure if those cops from when you go to the crackhouse on the beach were there. But I guess that could be it.
There are no pedestrians in the garage anymore than there are spoons in Neo's hand.

I was once fighting the gang members when the patrolling cop near Gimbles heard the fighting and went into investigation mode. He walked into the parking garage and saw the fight and I got hit with a Masquerade Violation and Criminal Violation.