Will The Fanatic encounter stay in the same place?
From the wiki
If you decide to run away from the Fanatic, he will appear in the next encounter, fulfilling his promise to hunt "the Cursed" down.
So, you will meet him again immediately after retreating, even if you were to go to a different room in the dungeon with a monster encounter, you would meet the fanatic there again. If you feel, your party isn't up to handling the Fanatic, you should retreat from the entire dungeon.