Also worth noting is that IKs won't work on I-No during Megalomania. You'll just waste your Tension meter.
After knowing how to properly deal with it, Megalomania can serve as a breather for you to gather your wits about you for the actual fighting after the dodging. I don't know how it is in this PC version, but I-No would use Megalomania whenever 25% of her life bar is taken. It's possible to cheat a bit by making her life bar jump from just over 75% to just under 50% with a high-powered attack, but it isn't worth risking a lost round over. This also means that getting to each Megalomania is harder as the fight goes on and I-No's defense increases with life loss. It's much easier to get her from 100% to 75% than from 25% to 0%, which is why the 25% Megalomania is a great time for a breather.