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I am not sure what the priority is here, and I'm playing on controller, but it is very inconsistent. Sometimes it targets thing that's near me and sometime far away even if I'm facing both things. Might be influenced my camera I'm not sure. But please allow an option where it targets the closest thing, regardless if you can see the full body or not or if you're facing it or not, based on the filters.
Targeting options say "Nearest to Farthest" and "Farthest to Nearest".
In reality, those actually behave as "Left to Right" and "Right to Left".
All I can really suggest are workarounds, such as using a "/targetenemy" or "/targetpc" macro, both of which target the nearest possible target within view.
On the bright side, the filters for a controller are much better than the basic filters, which are nearly useless.
in non combat mode your target filter is set to ALL (enemies, neutrals and allies) so your tab targetting will cycle through the lot
once you start combat it changes to OTHERS (enemies, neutrals)
there are keybinds that have blank entries as default. this are targetting filters. you can set them to a key so you enable ENEMY filter instead of OTHERS while in combat so even if you tab target it will only pick RED targets and never TAB onto some random non agroed mob. not sure if this filter can be made a macro so you can put this special filtered 'TAB' version to replace your current TAB action though.