Hmmm, I should know this..............................
The pet will attack the closest hostile target, usually the MM, following it's usual agro AI afaik. Try it ingame by confusing a consiglieres singularity...great fun 
I miss him in the weeping of the rain;
I want him at the shrinking of the tide;
The old snows melt from every mountain-side,
And last year's leaves are smoke in every lane;
But last year's bitter loving must remain
~Edna St. Vincent Millay
Pistol fought an illusionist the other night and he just kept on decieving the gang and they kept on trying to shoot anything and everything hostile near them, at random. Its same with any other AT when under the 'influence'.
Just so you know, this is not how the illusionist won the fight.. well it kind of was anyway. After nine minutes of them all 'trying' to kill each other, they finally managed it leaving the MM (Pistol) 'unguarded' and also incapable of doing much under that damned Spectral Terror.
But its okay anyway 'cos I too have a high level illusionist and can just woop him out when I'm feeling evil.
Probably the only reason why i kept mass confuse on my controler was so that i had a way to fight mm's 
As for the mastermind's side of things its not too hard avoiding mass wipeage by confuse, first off you need to get your pets to stop attacking each other, best using passive mode for this and if you have stimulant or any other sort of mez clearing ability use this to fix em up back to good as new.
Question that came up last night when playing CoV with my Mastermind friend. Now I'm not a big (or indeed at all) PvP player, though during my one excusion I found out what happens when you use a confuse power on a player, the targeting gets reversed. But we were wondering what happens when you confuse a mastermind's pets, or any pets for that matter. Do they act like a confused mob and attack the Mastermind or other members of his team, or is their targeting just switched mearning the mastermind can't target you with them or is this affected by what mode they are in to begin with (ie is Defensive different from if they're on Aggressive)?