Did some test. The psp receive input while dialog is displayed (both sceCtrlReadBufferPositive and sceCtrlReadLatch). And for TOE, if you press X and keep pressing, the TOE menu disappear like on PPSSPP. I think it's just a timing issue. On the PSP, there is a fade for the save menu. So the user release the button before the game continue. If you press the "X" on PPSSPP very fast, the menu of TOE don't disappear.

So no need to block the control. We are just missing the fade (or a delay between finished and shutdown status of dialog).