Ooo look a question I can actually help with! lol
Bold font for TLDR version.
I was running into this same issue and it was a pain during the fates just like you mentioned. The other persons answer of using the filters is obviously a great suggestion and I definitely recommend it once you figure out how you want to use the filters and what way suits you best.
But, until you get that figured out, I found a really quick and easy fix to the problem so you dont have to change any settings right away
So when you are playing on the ps3 the default is to target the thing closest to you, which works out great since that is usually the thing you want to punch in the head, but when your weapon is sheathed it also targets people.
So long story short If you simply hit L3 it will pull out your weapon and then you will only target the mobs, not people, hit it again to target other players now you can do fates without losing your mind