It appears that in rare cases, it's possible to flyto PCs without seeing them on where. To recreate.

1/ Person A stands in Market Square of Galadon.

2/ XXX moves OUTSIDE OF GALADON one pace (it also works with two paces, but stops working beyond Eastern Crossroads).

3/ XXX "flyto Person A".

4/ XXX, even though not in the same area, and is outside of Galadon, will fly to Person A standing in Market Square.

I hope this makes sense.

Not all flytos are about being in the same where.