It's an interesting setup, and stats may help the playgrounders give feedback. I'd include party level and basic composition, maybe, so balance can be considered.

So. Keeping in mind I have no idea how the threat level of this thing shakes out as-is, I have to say the memory-inflicted fear seems like a waste at the end of the final dust-up. Why not have some of that dust puff into the air when the guardian is knocked to X amount of health (half?) in each stage instead? Or just twice, put between the two power-ups.

Give it a radius to target melees, or have the guardian sling bits of its own, crumbling arm at whoever brought it to that breaking point to allow it range. Then wisdom save of X as you describe the memories, or that character is frightened until the end of the guardian's next turn.

A one-target effect that happens two or three times and lasts for a round shouldn't swing things too terribly unless this was already on the deadly side.