The area of effect damage may trigger mobs to flee if it happens in quick succession. For that reason it's also a tool of crowd control, because fleeing enemies cannot attack or use skills.
Even though it triggers AoE damage scattering, it can have devastating effect in conjunction with a minion master. The numerous attacks from minions can trigger it up to 10 times before the enemy AI decides to scatter.
The AoE damage only applies to adjacent foes. The original target is not affected.