The scroll of scare monster causes monsters in your visual range to flee, though some may resist. When dropped on a square, monsters treat that square as if Elbereth were written on it (meaning monsters that don't respect Elbereth won't respect scare monster). If you pick up a blessed scroll of scare monster, it will become uncursed. If you pick up a cursed one or a previously-picked up, non-blessed one, it will disintegrate. The game will report "The scroll turns to dust as you pick it up." 
Scrolls of scare monster in shops can get you in trouble in the early game. If you pick up a scroll in a shop and it disintegrates, you owe the shopkeeper for it; if you can't afford it, you'll have to sell your other items or risk angering the shopkeeper. Be careful picking up scrolls in shops until you have a decent amount of gold. A safer alternative is to #chat while standing on an unidentified scroll; if it price-identifies as costing 100 gold, only pick it up if you can afford to pay for it.
Reading it will result in one of the following messages:
- "You hear maniacal laughter close by."
- at least one creature was affected
- "You hear maniacal laughter in the distance."
- no creature was affected (excluding pets)
The scroll of scare monster originated in Rogue, where it had the same effect (although b/u/c distinctions did not exist).