I'm a little concerned about the fear mechanic in this game. It just sounds like alternate hit points. It doesn't make sense for the heroes of middle Earth to just bug out because they got too scared.

I think it will cause mental stats less reliable: wit, spirit, and wisdom. A face up "fear" card could cause "despair" or something which will make your spirit tests harder, requiring more successes. Don't forget, a big part of being a hero is overcoming one's fear.

We don't know enough yet to say how this will all workout. It is fun to speculate though.

One of the things that made the Nazgul so deadly was the fear they created. In the books we really only ever see the Witch-King enter combat. Sure, he was a formidable warrior, but any normal person would have just ran away in mindless terror than face him in battle as Eowyn had.

So I think "fear" is a super important, and thematic!, aspect in this game.

So true! The fear was one of the most important ”weapons” of Sauron!

Fearful behaviour can also make one susceptible to acts of madness, cowardice or treachery, i.e., falling prey to the shadow (e.g., Denethor).