I think this could be a fascinating mechanic for dwarves.
If a dwarf gets attacked, or has some sort of bad experience with an animal, or a situation, he has a chance to develop a phobia. In the future, a phobic dwarf would always flee from his fear! Even if his phobia is armadillos or something, and he's military, and it's a pet. Scared to hell of em. And he'd consider engravings of it to be worth *-2 or something. It may extend even into a dislike of eating the meat, or not.
Of course we'd see it in his personality, along with his likes and dislikes: "Urist McPhobic likes adamantine and figurines. He absolutely detests purring maggots. He is terrified of one-humped camels."
Naturally, the younger a dwarf is, the more he's susceptible to getting one, and there's always a chance he'd get over it.