Monsters AI is like 5 years ago

[Frontcannon]

You see a monster and he is coming after you, you think to outsmart him by hiding in dark corner but the monster smells your fear if he is coming to close and will kill you.

Most of the monster encounters are in closed areas, so you can't run indefinitely from a monster. You'll have to hide and wait for it to go away, so what's the point of hiding if it'll find you anyway?
That's not scary, that's frustrating.

Sure, the monsters could have been a bit more intelligent, but the methods of hiding are limited. Increasing and changing the monster's AI would mean to change a lot of other gameplay elements, and Frictional doesn't really have the resources for that.