Took a faction hit while sitting and using eye of Zomm
 

Only had this happen once while watching others kill with an eye, and couldn't reproduce it, but sitting in Hands room in Lguk I received a faction hit just as the other group finished off their mob and the eye poofed on its timer.

I know that back in the day it use to be possible to take hits if near mobs in some instances, so this one might be working as intended.