Fight shy of means to avoid something because of fear, reluctance, or dislike. The correct answer is this meaning because the expression is used figuratively, not only by its literal words.

Examples:

• He tends to fight shy of public speaking.
• In an HSC essay, Fight shy of can express this meaning: to avoid something because of fear, reluctance, or dislike.
• When this expression appears in a passage, connect Fight shy of with the idea of to avoid something because of fear, reluctance, or dislike.