What is the purpose of Paranoia Poison?

In the Bard’s Tale IV (Director’s cut), you can train your rogue to create and apply Paranoia Poison:

Battle Read; Channel 1 Apply paranoia poison to your weapon that lasts for 2 turns. Any enemy struck with a poisoned weapon is terrified for 2 turns. If this channel is interrupted then this adventurer is terrified instead.

However, this doesn’t work as I’ve expected: the enemy is indeed terrified but only during YOUR turn (and my in-game tooltip says that it works for 1 turn), when he cannot attack or move anyway – the effect goes away as soon as player’s turn ends.

So is it a bug? Change between regular and Director’s cut edition? Because the only possible usage that I can imagine for this skill is to use it on enemies that are in a stance allowing them to counterattack (but so far I’ve met them only once and it was easier to simply break their stance).

How can I use this skill efficiently? Or is it completely worthless?