So, I'll start by dropping the text of this ability from Archives of Nethys, and will italicize what I want to talk about.
Conservation of Energy
Energy can't be created or destroyed, only transferred or changed. Whenever you use your magic to add or remove energy, you must then balance it with the opposing force. The first time in an encounter that you cast a granted spell or a standard psi cantrip from your conscious mind, decide whether you're adding energy or removing it. Once you add energy, you must remove energy the next time you cast one of these spells. When you Refocus, you restore yourself to a neutral state, allowing you to once again freely choose whether you add or remove energy on your next spell.Adding Energy: The ability gains the fire trait, any damage it deals is fire damage, and any resistance it grants is to cold damage. It loses any traits matching damage types it no longer deals.
Removing Energy: The ability gains the cold trait, any damage it deals is cold damage, and any resistance it grants is to fire damage. It loses any traits matching damage types it no longer deals. Fiery body grants ray of frost instead of produce flame when cast this way.
Mindshift: When you use an action that has the mindshift trait, you can choose to add or remove energy to it instead of making it mental. Alter it as normal for adding or removing energy and change any save it requires to a Reflex save.
So, let's say that I'm playing a 2nd-level Psychic with the Oscillating Wave Conscious Mind who took the Psi Burst Feat at level 2. Here's the text of Psi Burst, for reference
PSI BURST ◆ FEAT 2
[CONCENTRATE] [EVOCATION] [MINDSHIFT] [OCCULT] [PSYCHE] [PSYCHIC]
Frequency once per roundWith a passing thought, you direct violent psychic energies at a nearby creature. Target one creature within 30 feet. It takes 1d4 bludgeoning damage with a basic Reflex save. At 3rd level and every 2 levels thereafter, the damage increases by 1d4.
So we see that Psi Burst has the mindshift trait, which means my psychic can add or subtract energy from it. Let's say I perform a round where my Psychic starts by unleashing their Psyche after casting a cold spell on the last round, and then casts Burning Hands which deals fire damage. So far so good. According to rules of Conservation of Energy, my next granted cantrip or spell has to deal cold damage.
Lets say I then use my third action to use Psi Burst. If I choose to add or subtract energy, am I restricted to subtracting energy and making this ability deal cold damage because I cast a fire spell for my last action? And equally important, does doing so mean I am now flipped back to needing to add energy to my next spell, making the next qualifying spell I cast deal fire damage rather than cold?
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The whole oscillating energy is poorly written (hence day 1 errata) so you can't give a total RAW answer that also makes sense.
RAI, I think the idea is that if you use your mindshift right to do elemental damage, that it works the same as a spell: you add or subtract based on your current state, and then flip.
So it's actually a useful 1-action way to flip before casting a spell that's more important to get into right energy type.
I agree that there is no coherent RAW answer (opening sentence says "magic," later refernces to swapping orientation are certain speficied categories of "spells," psyche abilities are magic but nto spells). I'm not sure at all of any RAI given how they made the special cantrips not intereact with CoE at all. I would have expected them to function normally (flip cold/fire to fire/cold, for no actual impact) but still flip your orientation. They didn't do that, so I don't know about mindshift.