I usually get those kinds of fear breaks if the mob is 'floating' in the air, it can easily be reproduced in the burning woods at the giant fort.
Example: Pull a giant from the fort, run down the ramp and to the side of it so the giant will not walk down the ramp but through the wall (of course without levi or while hugging the floor), he will appear to be on the ground but the server probably still locates the mob higher in the air than the client displays him, fear will instantly break as long as he hasn't walked about the same distance away from the fort as the ramp is long (the point when the mob finally reaches the ground).
Did you per chance use DMF and levitate quite a bit above the ground when trying to fear that goblin, maybe even pull the goblin from a bit away so he 'walked' up into the air? I think the problem here is that the client displays the mob at a different height level than he really is and the server hinders some spells like fear from sticking in an effort to prevent exploits (perhaps mobs in the air can't find a 'fear path' and that breaks fear instantly)? This can also lead to problems when trying to loot corpses. Pull something while levitating way up high and let it die next to you. Visually the corpse will fall to the ground but the corpse location server side is way up in the air and not lootable.
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