The Talisman FAQ states:
Q: The Minstrel draws a Dragon and an Object in the Ruins. If the Minstrel does not attack the Dragon, does it count as evading so he can take the Object?
A: No. Choosing not to attack an Animal or Dragon does not count as evading. If there are any Enemies on the space and the character did not kill or evade them all, then he may not take any Objects on the space.
How is it that the Minstrel may not pick up the item? His special ability is that he may choose to fight or not to fight Animals and Dragons. If he chooses not to fight them that is how he chooses to encounter them. No, it is not an evasion. But it is still an encounter, as his encounter is the choice not to fight because he doesn't have to. He should then be free to take any items on the space.