I don't necessarily see why they'd flee from all spirits on principle. Idrahil didn't double-cross them, nor the earlier guard-captain; good spirits about even with the Diviner and Ingir, malign elvish spirits.
But are you actually making the Master-Smith a Dwarf? This I'd really rather avoid. I listed him earlier with Elven coavaltar the Orcs feared, I've had him chanting an elvish incantation of Curufin's, and I also have him down in the background as being the tutor in smithying of Lindir...he's definitely a Noldo elf.
After my original pedantic, petty villain Diviner was turned-to great effect-into a sort of menacing goddess figure, like Jadis or Dark!Galadriel, I think I'd rather keep this Smith's race as I envisaged it, I'm afraid.
I'm perfectly happy, though, for you to encounter Dwarves, possibly even ones who know of and trust the Smith, unintentionally luring you into his tutelage and clutches. It might be a jolly and refreshing interlude in a small Dwarf cavern with a family of three or four, all that remains of the Naugrim workers. A nice calm before the storm haven moment. Would that be alright? I increasingly think it might be rather fun. Only I'd rather not take on these Dwarves myself, since I already have the Smith-who would like to play them? Would you, Envinyatur?
Tonight I'll take Malris and Tasa on the next stage of their journey and get them to the shore of the underground lake.
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Among the friendly dead, being bad at games did not seem to matter
-Il Lupo Fenriso
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