Will units also react to movement in tiles other than the one directly in front of them?
The units react only to units they see (90 degrees cone) or units that have hit/shot them (even if they are not in the cone).
With the new option = 2, they will also react to units that have attempted melee attack on them (both hit and miss count!).
So theoretical situation like this is possible:
1. you melee attack a Lobsterman from behind... hit or miss, doesn't matter
2. Lobsterman has low TU and poor reactions, so it won't attack you immediately.... but it WILL remember you
3. now you run away from Lobsterman (outside of his vision range)... slowly decreasing your TUs
4. as soon as you have low enough TU, the Lobsterman will turn around and shoot at you
Enjoy the pain.