[Dev] I've located the cause of this major bug with fear.

[Irashtar]

From http://angband.rogueforge.net/trac/changeset/899

trunk/src/xtra3.c
r898 	r899 	 
651	651	        { TMD_CONFUSED,  S("Confused"),   TERM_ORANGE }, 
652	652	        { TMD_AFRAID,    S("Afraid"),     TERM_ORANGE }, 
 	653	        { TMD_AFRAID,    S("Terror"),     TERM_ORANGE }, 
653	654	        { TMD_IMAGE,     S("Halluc"),     TERM_ORANGE }, 
654	655	        { TMD_POISONED,  S("Poisoned"),   TERM_ORANGE }, 
…	…	 
658	659	        { TMD_HERO,      S("Hero"),       TERM_L_GREEN }, 
659	660	        { TMD_SHERO,     S("Berserk"),    TERM_L_GREEN }, 
 	661	        { TMD_STONESKIN, S("Stone"),      TERM_L_GREEN }, 
660	662	        { TMD_SHIELD,    S("Shield"),     TERM_L_GREEN }, 
661	663	        { TMD_BLESSED,   S("Blssd"),      TERM_L_GREEN },

Check out line 653. Changing that to TMD_TERROR might fix some problems. I don't know if that'd the only error, so I'll leave it to those who know, but don't take too long. ^_^