It also seems to focus in on skeletons.

It also will zone in on a tamed dragon if it is not in a horn and is in range. This i don;t mind, but trekking around the map being directed to dragon skeletons is a bit of a pain.

Don;t know if this is intended behaviour

I intend finding skeletons as a feature. Not sure if I like the fact that the eye also finds tamed dragons. The behavior is correct — find the nearest dragon, but just a bit annoying.

I'm working on a mod that also helps find I&F dragons. I've found that if you have an EntityDragonBase dragon, you can call dragon.isModelDead() to find out if it's a skeleton, and dragon.isTame() to find out if it's tame.