Yeah, I completely agree, either this is a bug or it's just really really bad logic. I get so frustrated with those two items you mentioned, HoL and Wand of Speed. For example if I'm running away and activate HoL, sometimes my Demigod turns around and tries to attack someone and inevitably takes damage. And the two main uses of Wand of Speed - chasing and retreating - are made almost impossible because of this issue. By the time I've realised I need to retarget after activating, the fleeing Demigod has usually got far enough away to outrun me. And I've died lots of times from trying to run, activating the wand, then staying in the fray. Even one second wasted is easily enough to be killed.
This post is probably longer than it needs to be but I needed a good rant after last night's continual frustrations.