I like the concept, and it would add a lot to the overall experience for lesser foes to just get out of your way at some point.
But unless implemented in a much more complex way, this same mechanic would be inappropriate in a lot of cases, perhaps wholly so - it works great while playing towering nordic wargods, magicka-emanating master wizards and varliance-infused hero knights (hint to bandits - RUN AWAY!), but what about the master thieves, disguised anti-heroes, or that slender, unassuming gentleman who happens to be the single most deadly assassin in Tamriel?
Powerful characters won't necessarily look or even feel dangerous to other people and creatures, so the "flee" mechanic ought to take them into account somehow. Ideally, anyway.
your right, at the very least least for the humans (as stated before, if the animal's can tell your level it could be of supernatural reasons). There could be an "intimidation factor" implemented. Certain clothes, armor, weapons, spells (works when equipped), tattoos, scars, or hairstyle could all attribute to this.
EDIT: i guess if they go through all the trouble of doing that though, it would probably just be the same for animals