Discipline not appearing?

I believe the true name is Merits and Flaws, from the pen n paper game. I renamed these in TFN to be consistent with the canon rules. But the word weakness still gets the point across well too.

Insight as tier 1 and Hysteria as tier 2? Wow, what an idea... I kind've like it, but I like the old way too. Glad I don't have to make that decision, it's on Childe's shoulders.

Merits and Flaws are things to personalize one's character. They are (usually) not clan based.

However, the little plus one gets from picking a clan in Bloodlines does not exist in pen and paper.
Clans differentiate themselves with their weakness
https://camarillaedition.darkbb.com/t885-the-clans

Here they are

Hm, I don't think I want Hysteria as level 2. It's so similar to Trance (Dominate 1). To be absolutely honest, I don't like Insight at all. I just haven't bothered with changing disciplines from the way Zer0 has introduced them for CE 1.2 (yet).

For the idea of Malk clan weakness: no persuasion because nobody can understand what the hell the Malkie is blubbing about, and using more Dementation in the dialogs instead. Perhaps I could make the needed Dementation level dependent on charisma, so that attribute is not completely unnecessary for a Malk.

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There is one major diffrence between Trance and Hysteria: Trance costs blood, Hysteria is free.

I'm curious what exactly you don't like about Insight. I found it to be a nifty little utility buff.

The explanation for no Persuasion sounds plausible enough, but I'm a little warry. Using Dementation instead would probably be fine for mortals (especially if you make it so that the Malk also needs to have an equal amount of Charisma in order to dementate people), but it wouldn't be as fitting for use on vampires. Specifically, the player's interaction with Strauss in the gargoyle quest comes to mind. I don't think the player should be able to dementate him.

Maybe a simple penalty to Persuasion would be better?

Persuasion penalty is much better than removing persuasion and using dementation in almost every dialogue would make it less fun at least for me...