The auction went
1S-2C
2S-2N
3C-3S
There was hesitation on the 2S and 3C bids. Now, a hesitation is not in itself an infraction. The question is, did responder take an action which was "demonstrably suggested" over a logical alternative by the hesitation? In order to answer that, we have to figure out what the hesitation(s) might have suggested.
It appears to me the hesitations both suggest that opener is unsure whether to bid on, and so they suggest that perhaps responder should pass rather than continue. That being the case, passing would be an infraction of Law 16, bidding on would not. So I would rule "no infraction, no adjustment". I am, however, prepared to be told I'm wrong - which I'm sure David will do, if necessary.