dnd 5e – What is the source of the fear in the Hallow spell’s extra Fear effect?

The source of the fear is the whole area in which the spell was cast.

I know Cubic already pointed out that RAW is unclear, but I’m going to attempt to explain why this is the most logical interpretation.

First of all, this is working from the assumption that a source is “whatever causes a given effect to manifest”. Since the trigger for all of the effects is being in the area this must also be the source of the effect. The point at which the spell was cast was simply to determine the centre of the circle the spell affects, but the area itself is what causes the creature within it to become frightened.

So to address point 2, since that is what I’m asserting the source to be:

You’re right that being inside the area means that every direction leads towards the source, but keep in mind that creatures rarely move arbitrarily; they are generally moving towards a destination (be that an enemy to attack, a vantage point to scout, or down an escape route as they flee). Rather than saying this creature can’t move because it’s surrounded by the source of its fear I think it’s more accurate to say this creature will head towards the closest destination point outside the spell’s area. This means that when it moves, it’s still moving away from the source of its fear, even if it doesn’t have enough movement to leave the area yet.

Functionally, this results in pretty much identical behaviour to Cubic’s recommendation, since the closest exit from the part of the area the creature is in will always end up being the direction leading away from the centre (this also covers an edge case with using the origin as the source meaning the creature would stop moving if the other directions are blocked somehow; considering destinations rather than individual moves means they could move towards the origin if it’s the only way to go to get out of the area due to walls, people blocking the way etc)