Perhaps your objection is that Nagasena is mixing up conventional and ultimate descriptions. Is that correct? On the other hand, your (and Nanavira's) objections may have more to do with how the passage has been translated. It may be that "deeds are done by this mind and matter" is an awkward translation.
I still don't personally see a fundamental difference between this exchange and the Sati admonition. In that case it was consciousness, rather than nama-rupa, that was spoken about arising in a different life. But I guess that reading also contradicts the Nanavira interpretation.
How about the many suttas where the Buddha speaks of beings being reborn according to their kamma. Would Nanavira criticise those too?