Mozgus: To follow up, the rat on a stick salesman didn't like how I mentioned he used human body parts in his food, and he tried to kill me, and sure enough, no matter what, the guards are already shooting at me before I even get a chance to fireback at the salesman. I did nothing wrong.
You did do something wrong. You provoked one of the upstanding merchants of the Hub into a fight, and the cops are doing their job, which is to protect the citizens of the Hub. You're just some asshole that wandered in out of the Wastes, so it's open season on you. This is the way the Script is intended to work.
It is possible to blackmail Bob into giving you money, but the risk is getting into a fight, like you did. It is not possible to "turn him in" for using human meat. Some folks think this is an oversight in the quest list, but I'm not sure. I think that it could have been an intentional design decision. It's a tough world, and at the end of the day, the folks of the Hub don't care if "Iquana Bob's is People!" Just as long as it's nobody they know, and some jerk from the Wastes doesn't rub their noses in it.
Easier to shoot the messenger. Maybe Bob will fry him up after...
Mozgus: I'm just not going to listen to any doubters. This is a flaw in the game that they never fixed. Either that, or it's the dumbest, laziest AI programming I've ever seen in an RPG. Take your pick.
Just because things went badly for your character, it doesn't mean the game is flawed. The game is meant to have a certain amount of difficulty. There are tons of places where a small slip-up can really ruin your day. That's why the manual says to save often. They're not pulling many punches, so when you get wiped out, you're supposed to grin and bear it and keep trying.
Yes, you are the hero of the story. But it's a rough world, and sometime the good guys get schooled. You can "win" the game, but it's not possible to get a happy ending for everyone in the game.