in create.lua lines 2268-2283:

-- hostile;
if f.state.player then
-- disable on hostile players
if not NAMEONLY_HOSTILE_PLAYERS then
return
end
else
-- disable on hostile NPCS
if not NAMEONLY_HOSTILE_NPCS then
return
end
end
-- disable on attackable units
if not NAMEONLY_ALL_ENEMIES and f.state.attackable then
return
end

should be

-- hostile;
if f.state.player then
-- disable on hostile players
if not NAMEONLY_HOSTILE_PLAYERS then
return
end
else
-- disable on hostile NPCS
if not NAMEONLY_HOSTILE_NPCS then
return
end
-- disable on attackable units
if not NAMEONLY_ALL_ENEMIES and f.state.attackable then
return
end
end

since according to the option description, NAMEONLY_ALL_ENEMIES is under the 'Hostile NPCs' category and should only apply IF the frame does not correspond to that of a player.

Kui Namplates Version 2.29.18