Well if I have a dragon that casts Fear at the start of the battle it is among the first to act. I would guess that is because the other units lose their turn and not because of its insanle high Initiative (which it has not).

The Fear_Ability autocast is essentially the same effect that gets added from Daze. Here is the XML for the game effect:

I have been testing an autocast spell that applies this effect for my own sovereign. Without changing anything, it has no effect other than making the text +Afraid appear, and -Afraid appear after 3 turns. It doesn't even show up in the units enchantment pane.

I tried changing TacticalUnit to Unit, and then the effect shows up in the enchantment pane for the unit, and the particle effect stays active for the whole duration, but the unit still doesn't lose any turns. As far as I can tell their ChanceToLoseNextTurn code in the source is just broken.

Did not mean to hit that button (I hit quote instead of edit).

Too late, it's been released to the public already.

In my games, fear has always worked as intended.