Thinking "I must beat this creature" is, with a few expections, an out-of-game attitude. Many characters aren't likely to want to face a Dracolich if they don't have to... if it's in character, then walking away is fair play.
Yes, like Quitch said: exactly. I can agree with this honestly enough, but that doesn't mean I won't ignore it.
Seeing as how it is a game, the ability to reload and taking on the challenge are two things that come much more easily. I'll want to challenge him to see if I can beat him; granted, an attitude amplified by my being on this side of the screen and my character being on the other. This is assuming he isn't some kind of sadistic joke, or isn't meant to be killed. The same is true of Ascension and many other improved battle mods. It's the challenge that often draws people towards them - a common attitude. How many level 9-10 parties would even joke about taking on Firkraag? Yet how many people do it anyway?
That's not to say I plan to attack him the moment I encounter him. Just to say that one of these times, I'm going to want to try and kill him.
I'm interested mainly in the roleplaying in this mod, so no predetermined notions are going to decide how it pans out for me, the first time at least. If it's in my PC's best interests to walk away, then I will.