In Kotor the standard AI listens for the shout "GEN_I_WAS_ATTACKED". If heard the NPC will attack the character who was last hostile towards the shouter. If an NPC can hear a shout usually depends on if the shouter is within their perception range. Zone controllers add an additional restriction to that.
Silent shouts are a way for NPCs to communicate in battle. In KOTOR it's mostly used to inform everyone else around that they've been attacked, so they all enter combat mode and chase after the attacker.
If an NPC hears a shout their OnDialog event script is fired. This script can then do a match of the shout heard, and take appropriate action.
Creatures who have their spawn script set to enable zone controllers, or creatures spawned by encounters, will associate themselves with the nearest zone controller, if there is one within a 100 meter radius. They will then only respond to shouts from other creatures who are linked to the same Zone Controller.
[This can be used with] encounters, or an OnSpawn script that enables the NPC to use zone controllers, by having: GN_SetSpawnInCondition(SW_FLAG_DYNAMIC_COMBAT_ZONE ); in their OnSpawn script.
They could be useful if you have several groups of enemies nearby, but you don't want them all to engage in combat if you attack one enemy without the others noticing on their own.
Normally everyone within perception range of a creature you attack will join the fight.
If used in a combat intensive area it could be used to allow the player to "pull" some enemies away from the others and fight a few at once.
(Given that they are hostile, of course