Not sure if this is a design issue or a bug, but I think we should think through it (the next 3 paragraphs are pure story-telling, go to paragraph 4 if you just want to talk about the issue):
I was playing my 3rd game of FfH 0.3 (I had played 2 at 0.25, I had the time for my third game because I lost the first two so quickly!) and I was winning, when Stephanos came and ruined my fun. He blasted me, went into a city, and attacked. I lined up about 20 swordsmen to take him down, and then I fond out about fear.
OK, ok, don't panic. I remembered there was a spell, courage, or something like that. Look it up, with a spirit mana (I just had the ability to build adepts, had a node), damn, have to get the adept over there, wait a few turns. OK, got spirit mana. Now, I have to wait for my adept to get enough Xp's to cast. Got it! In the meantime, I have a force of catapults. What better to hit the nasty guy, let's lob rocks at him. 80% Withdrawal after all. But the catapults even can't bring him down, they also fear.
So, I now get the adept to the square with the army. About 20 - 25 guys against one horseman, its like in regular Civ when Monte sends 30 ancient guys against a rifleman:
Now, here is the issue. The catapults can't attack because of fear. However, the courage spell doesn't work on them because they aren't living. I would think that either non-living units should be immune to fear, or they should be able to have courage cast on them. Saying a non-living creature can never attack a unit with fear seems too strong.
Best wishes,
Breunor