You've done this before, haven't you? Fine time for me to be out of bullets...
Mel is an ineffective would-be mugger the Lone Wanderer may come across as a random encounter. He wants you to give him all your money. He will appear as friendly on radar, and his clearly unassertive and stammering speaking voice make his demands pathetic.
All right. I haven't killed anyone all day. Let's go.
I can't give you all my stuff, sorry.
If a skill-based topic is used, Mel will end the conversation without turning hostile, and will cower as if fleeing. If you simply refuse to give him anything, he may turn hostile. Mel will also fight any roving hostiles that travel near him (i.e. raiders or critters). But, since his shotgun is unloaded, he's limited to fighting with his fists. He's about as tough as an average raider, although without weapons, he's a limited threat.
After speaking with you, Mel will hang around the area where you encountered him for the rest of the game. For a little while, he will be shown as 'fleeing', but afterwards he will be hanging around the same spot forever.
Crouched in one spot, cowering with his arms protecting his head, Mel still counts as 'fleeing' and can not be pickpocketed.
Mel may run off to a gas station outside Old Olney and then say one of the following phrases...
Uh hey, I'm outta here, so see ya.
I mind my business, you mind your business.
I got nothing to say to you.
I'm not looking for trouble, or conversation either.
Even if Mel gets a weapon with ammunition from a nearby enemy you can still say "That gun doesn't look loaded." and he'll still say "What, how did you know that?".