However, as soon as some enemies are out of LoC AOE, those unaffected still chase the player (even if line if sight was broken), thus preventing player from disengaging. And often also making their enraged buddies chase them instead of killing each other ("instead of" because they use their AP chasing, not attacking).
I know it probably sounds like I'm just arguing with everything you say, but I really do agree with most of where you're coming from. But I feel like I should add, that sort of situation is exactly the "tiny bit extra" that I was talking about when I said LoC is just as bad without FF as with. If you've got a group that doesn't all fit in the flashbang/LoC AoE, then maybe you put psi slow on one so they end up running in to the middle of the group, and maybe you fear another so you don't have to worry about them for four turns. Next turn, when the slowed dude is in the middle of the incapped group, you can stun 'em with a mental breakdown or a tk punch. Then next turn, they get the LoC Enrage along with all their friends. If that problem add was a robot, well, you drop an electrotrap at their feet/treads instead, right?
Planning out an ideal AoE does take a slightly grander scope than a single turn, but I've always found it relatively easy to do. With good setup, almost every fight in the game should be manageable in a single turn once you've placed the pieces on the field where you want them - a group enrage; a ThermoD bomb; a Psionic Mania Cryo Orb followed by a Pyrokinesis to take care of anyone left. Sticky, tough groups like Balor just require whatever you'd normally do plus an Entropic Recurrence on the boss. One turn and it's all over but the dying.