Take a break from playing is a friendly interaction, unless Showtime moved it. It seems to have come with Late Night.

I'm really not sure if ST moved it but if you have the show object menu in Retuner set at True you can click on the instrument NRaas>Retuner>General and it will bring up several options including Take a Break. I think it can also be accessed by just clicking on the sim playing...not sure on that one though. Will have to check it out.
On the tips: I've got a couple skill level 9 and 10 sims who were playing for tips but didn't see anyone tipping but then I did not watch for long. Where I had Watch set at False I think the only way they'll see tips is if the active sims are directed to watch. I left the dance option on True and the sims are dancing as the musician plays though.

I click on the sim and the option always shows "take a break from playing". I do this a lot throughout town. Not sure if it hurts relationships; but, I can't help myself (level 1's annoy me! Especially the violin).