Ohkay, so...
First off, d20srd.org blows big donkey nuts. I've found NUMEROUS errors on that site in the past, and have since never used it. I like reliable things. Try
this site.
On that note, I quoted a dragon's frightful presence and the Fear entry, neither of which mention it being a fear effect. Now if you look at your quote, Frightful Presence is a separate entry, not under Fear. It's there alphabetically. So your quote is just wrong. That being said, when I scroll further down on
this page, I see that it does reference it as a fear effect.
So yes, a dragon's frightful presence is a mind-affecting fear effect. I concede that point to you.
Now let's look at a Paladin's (one of the weakest classes) 3rd level ability. Is that immunity to fear? I'm going to go ahead and call bullshit on a Paladin being able to stare down a CR 30+ charging Red Dragon. No fucking way. So whether that's a flaw with the design of the Paladin or the Dragon, I don't know or care. But I do know that it's bullshit.
Irregardless of the above, the ability is fine as is. It's intent is to show that a Knight is so impressive, so majestic(insert adjectives ad nauseam), that his presence can cause you to be unsettled, or even make you cower/flee. The flavor is EVERYWHERE in fantasy settings, so this is merely a mechanic to fit that.