Is this correct, or should the genie’s concentration on gaseous form have been broken by hypnotic pattern?
Innate Spellcasters have the same requirements for concentration as other spellcasters
The rules for innate spellcasting (MM, p. 10) do not describe any unusual interactions between innate spellcasting and concentration. As such, concentration can be broken on an innate spell by the usual methods found on page 203 of the PHB. Amongst them are:
Taking damage. Whenever you take damage while you are concentrating on a spell, you must make a Constitution saving throw to maintain your concentra tion. The DC equals 10 or half the damage you take, whichever number is higher. If you take damage from multiple sources, such as an arrow and a dragon’s breath, you make a separate saving throw for each source of damage.
Being incapacitated or killed. You lose concentration on a spell if you are incapacitated or if you die.
So according to the rules as written, the genie should have lost concentration on its gaseous form spell when it became incapacitated.