NPC's targeting when casting spells at PC's was definitely random (as long as their target was on their agro table) on live. We'll I don't know the exact mechanic, but it certainly seemed like it was.
My first toon in Krunark on live was a mage. In groups or solo, casters would always nuke me if I was in spell range instead of my pet. I remember being scared in seb groups as well if we didn't have an enchanter because multiple caster mobs could nuke down the cleric (or myself
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I am guessing Fear2 spell is just a NPC spell. A lot of mobs had their own spells while sharing some that PC's had access to. It's hard to know what the mob specific spell names are so im sure they just made it up when doing the code for that specific mob or what not.