After having a weird dream last night i came came up with the following idea:
Whenever a knight sees the giant kats, they should get a 'scared' mark(maybe make it a 1/5 chance). This makes them drop their weapons(cant attack) but increased run speed. Any block they touch when runing is destroyed and any enemy is stunned(because they are going sooooo fast, lol). Candles would remove the condition.
This idea could be adapted to graveyards and ghosts too.
i really like this idea. it is like we take the feeling in games such as Amnesia and express it in the cutesy spiral knights universe.
I like the movement speed increase because of the better mobility to avoid the bigKats, the stun and block duration are fun but can be abused, specialy the stun so i think that as an additional penatily it would be good to introduce: "on recieved status, shield breaks and does not regenerate untill the status effect is removed".
other than that we must define a more specific way to get the status. just looking at bigKats is a too frequent event- a bit less frequent is when a bigcat tries to bite the knight but fails or when a bigkat spawns near the player. Also we should have a mark system similar to what the recon does in lockdown when on the first mark recieved the knight enters the nervous mental state, on the second mark recieved the knight is in the agitated state and when the third and final mark is on stack the knight enters the terrified state and recieves the scared status as you described. after the status is removed the mark counter is reset to 0.
also it can be made that the end of the status "scared" does not reset the mark counter but only candle light. What is the diference in this is that we can have the scared status to be timed and not unlimited in dark places and the effect of the status to be reaplied if the player still has not reached a safe zone in the candlelight(candlelight still removes the status "scared" ignoring the time left of the effect) .