Ok since the last update Arcane Archers terror arrows no longer work on Constructs, undead, and oozes. Which is fine since it never made sense those MOB's could be made afraid anyway. However I would ask that the dev's help the old AA out by offering instead of banishing arrows, disrupting arrows.
something like: disrupting arrow's (-1 AC on hit to undead on Vorpal shot destroy undead, powerful undead may resist the vorpal shot and instead take 100 bane damage until sufficiently weakened.)
The fact is that on all the MOB's on which banishing arrows will work one could use terror arrows and still kill the aforementioned MOB's with the vorpal shot. Meaning that banishing arrows are not really necessary. However killing undead by damaging them with arrows is a long and time consuming process in medium and high level questing.