I have equipped and charged the axii sign of the puppet type and it does always make the enemy (drowner, bandit or alghoul) a friend. But with the exception of a group of drowners it never resulted in the puppet attacking the rest of the monsters. I have not been able to repeat the situation so far.
Do I have to attack the mob beforehand? Or afterwards? Does it have to be a melee attack? I tend to do the sign right before the fight, as it takes awfully long. For instance, I axii puppeted one of two alghouls, and then walked towards them to make them aggressive. I had the advantage of just one alghoul following me, but never did I see them fighting amongst themselves.