Sounds like you had some lag issues. This happens in dynamis a lot where you can't see bodies or mobs. There are several little glitches like that ingame that kind of freak you out. Usually its a combination of lag, screen refresh lag, and a glitch. Sometimes when my laptop graphic card gets too hot, my screen lags, and I don't see certain animations, so that is probably what happened here.
Either that, or your friend was using speed hack, invising himself far away from you and trying to freak you out. OK, so that was a bad joke, I don't think that is what was going on, because the NPC would really only be engaging the mob if your friend was, I think. I know that I level my NPC on BLM, and since I nuke and sleep, my NPC rarely ever draws her weapon...