For a while, one could terrorize 999 w/ survive fatal wound & get a
super-terrorized noble. This bug was reported & supposedly fixed. I
haven't checked to see if it is indeed fixed.
You should still be able to terrorize 99 w/ survive fatal wound. Fear
loyalty deteriorates at 1-2 points / month, as the rules state.
The other way to heal your nobles after beating on them is to use the
spell "heal" or to use healing potions.
-captain arrr, jr.