It does, unless you've HoTted everyone, which you shouldn't do on this boss. Fade wipes your threat entirely, making you start from 0, and then gives you the wiped threat back after 10 seconds, on top of whatever threat you have generated during those 10 seconds. If you have any sort of healing or AoE threat in the raid - Divine Storm is a perfect example, any kind of buff also generates aggro.
Pre-heal everyone and shield yourself in advance so that Weakened Soul can fade, and shield the tank right before the spirits. When the spirits zerg you just use Fade and shield again to run away via Body and Soul. If you're really that desperate, Guardian Angel will save you. Hell, even standing in one place and spamming Flash Heal will save you, I don't know how you can die on this fight as a Priest, really...