How does shadow of fear work?

Does it hex 1 person and everyone beside that person attacks slower?

Or does it hex everyone adjecent to the target when it's cast?

Everyone next to (lit: adjacent) the person you cast it on, and the person you cast it on.

Adjacent doesn't mean touching, but very close to each other. It's a very useful curse and I always bring it with me. In PvE it's fantastic, since mobs clump up I can easily hit 3 or 4 at a time and with high curses it lasts for > 30 sec. In PvP it's still very useful but harder to hit more than one target at a time.