They want fear to be more like all other spammable CC's in that players don't die or take a ton of damage while out of control of their character. Sort of like Polymoprh works, it should be casted on players to take them out of a game for a certain period of time, not as a means to do a ton of damage to someone while they run around.

If that is the ultimate goal, why all the tiptoeing? Just make fear break immediately on damage, like polymorph. Turn it into a cower so feared targets aren't unexpectedly fleeing into AE and breaking prematurely, or make them wander around a very short area like polymorph or disorients. Horror effects keep the running-away-at-full-speed because they're short duration and don't break on damage, like stuns.