It's not an exploit in the sense of exploiting a bug (as the respawn is intentional), but it is gaming a mechanic in a way that the designers didn't intend. It's not the same as grinding mobs for 15 minutes, because the respawn rate and density in normal areas is far lower - you can't just stand in one spot and mindlessly AoE things to build up massive chain bonuses. It's obvious that the intention was that you complete the FATE by attacking the target enemies and continue with the FATE chain. That you can game the system by ignoring the enemies you're supposed to be focusing on for such huge amounts of XP should probably be addressed, but it wouldn't be so bad if it didn't mean that players completing the FATE as designed are harassed for doing just what the designers intended.