I am remodeling an octagonal house that has a master bedroom and bathroom which make up the top floor. I want to remove the present ceiling so as to make the room vaulted (I will then have re-insulate, but that's another issue). My question concerns how to re-do the bathroom so that the bathroom area, within the vaulted room, does not look awkward or boxy. Any suggestions? Perhaps a few low divider walls to create a bathroom space?

You won't like that when it's done, I assure you. You'll have no sound privacy, and no way to contain and exhaust bathroom humidity or odors.

Without seeing a floor plan and cross-section, it's not possible to suggest a solution.

Depending on how the house is constructed you may not be able to remve any of the ceiling as the joists may be part of the structure holding the walls from falling out. Your best bet in this mannor is to get an engineer involved before you remove any walls or frameing.
I do not think there will be an issue, but better be safe the sorry.

Yes the partial wall idea works ok, But remember any steam and odors will travel over the top of the walls into the other areas.