What happened to Phinehas has happened to me, almost everytime. I stopped completely my magic training (for a while), despite the character being supposed to be a mage. Blue Way training costs way more that Axe, and not only it's not as effective (by far, but also it allows ranged attacks so that might be a balance thing), but any single time I engaged in some lenghty fight, someone would come and steal the kill. Actually I thought it was a 'feature' (magic attacks don't lock the target at all). It happens all the time. I tried also initiating a physical fight (attacking normally) then move away to cast. No matter if I land the spell or not, I'm gonna loose the rights on the target pretty soon. I spent once 11 healing potions on a mob, some mana potions, half an hour, just to be able to bring him at 5% health by means of both weapons and spells. Another guy came, single-hit killed him, moved away w/o saying a single word. Another time I had the strong impression that a certain player was camping me casting on a target, since he's been lingering around the fight area for while, and when the mod was almost down he attacked, landed a couple of hits and run away. Magic attacks don't lock the target, and (some) players are very aware of that.
Now I trained some Axe, and finally managed today to move away from rat killing. I've never meant my char to be a warrior of any kind (and stats speak for themselves, it's physically as weak as possibile, while being with high INT and WIL), but he's being way way way more successful as a puny fighter than as a talented mage.
As I see it, magic enables you to overcome you natural limits (at a price of being much more difficult to develop and expensive in terms of mana). That is, killing larger mobs. But if you don't own the kill, when you use magic, targeting big mobs turns out to be frequently a waste of time, a source of frustration, and a good chance for other player to exercise their rudeness. Not related to the topic, but have I mentioned my char is weak? he can't carry much. I've seen other players "camp" crowed areas just waiting for others to unintentionally drop stuff. They move fast in, grab the item, run away w/o saying a word. Now they might be playing a theif, I have no problem with that, but I consider it pretty rude to apply such a strategy w/o spending a word or two with the player (not the char), expecially if you've never seen him before. Like "hey I'm playing a thief, if you don't pick up your item i'm gonna steal it, sorry". Likewise it think it's very rude to steal a kill. You can't simply think that that mod is at 5% of health and nobody owns it. When I find a mod not at 100%, I look around, wait a bit, ask to anyone nearby, and only then I attack. That is, I make sure no one is on it.
OTOH, I have to say that too many times a mob won't fight back when magic attacked. Now I mix the two attack types (actually now I almost stopped using magic) but I think I've never seen a mob react to my attacks (well with autoattacking mobs you can't really know).
So, now that I think of it, it might be a bug with certain attack types. The spell I used is 'Freeze'. Phinehas maybe you're using the same? Actually I've seen mobs reacting to magic attacks of other kinds.