I haven't heard of this problem in a long time.
We use TO_SINGLE_BYTE to prevent this error for the ACTION, OSUSER, MACHINE, and USERNAME columns.
You must have an umlaut or some other non-ascii character in one of the other columns of V$SESSION. If you can tell me which column it is, I can work around it.
See this post: Toad for Oracle appears an alert with ORA-29275: partial multibyte character when i execute session browser feature on Toad for Oracle.