If you hit someone with an attack that does say 5 damage and they mastermind the damage to a character that only has 2 clicks left does the character with mastermind have to take the remaining 3 clicks since 2 kill the other figure?

Nope. All damage is transferred with MM.

No---the remaining clicks have no effect. It's just as if a Non-mastermind figure was directly attacked for five clicks and only had two left. The extra clicks have no extra effect.