The Fear (BWG p. 212) mentions that it only works once per target. Is this to say that, if Morgan the dark sorceress cast The Fear on you a year ago, and now she’s here doing it again, it doesn’t work? Or does it mean that a character cannot be affected by the spell again in that same encounter?
Correct. You’re only fooled once by the spell.
I think it would be fair to have it work again after a year and a day.
RAW, it’s once.
Fiction may, when compelling, trump RAW. If it works better storywise for it to be appended with, “until a year and a day have passed,” then approve it with the group, and drive on. Just be consistent in the campaign. Log all such house rules.