Perhaps it is getting reduced by battle spirit on the main target channel and then reduced again on the aoe, so in effect the aoe only is getting double reduced by battle spirit.
DephlaterMouse wrote: »On NPC outside Cyrodiil you'll see it hit for the correct amount per the description.
If you look at your character sheet under the buffs section you'll notice that while in Cyrodiil your AOE damage is reduced by 50%