Kinda makes you think the mobs go by a different set of rules.
This is common and typical in games like this. Not only in MMOs, but in any game with a PvE componant. To a large extent it is intended to prevent players (who generally are more intelligent than MOB AI scripts) from exploiting the line of sight system to gain an undue advantage. It is annoying at times to have MOBs break basic laws of physics in such a way, but in most cases I think it beats the alternative.
The issue with line of sight checks for PCs being so completely inaccurate, however, is not just an issue of annoyance or double-standards. It breaks aspects of the game, including the quest I mentioned.
I understand not wanting to take differences of character height into account for player characters, or even for different sized MOBs, but it shouldn't be that difficult to set the system up to use checks for player characters that are based on a standard height that is above feet level by at least a reasonable amount, such as +X height units where X is equal to the in-game scale equivalent of 1 meter. That's still low enough to be reasonable for the smallest characters, but is high enough to eliminate a large number of the line of sight issues currently present.
Of course such a change/fix would not fix the issue with the "Dangerous Mission" quest, because in that case it is an issue of an actual obstacle truly being in the way, but where there should be no obstacle. The only real way to fix that quest will be to shrink the collision bounding perimeter of the object, the stone pillar, and/or increase the bounding perimeter for the "crack" target so that the pillar itself can no longer interfere with line of sight checks for attacks made against the "crack".
So in short, this is really two bugs... first, the line of sight system that needs to be adjusted to be more functional, and second, the related issue of the broken "Dangerous Mission" quest.