Spoilers
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I did kill them all, though first time I did it pretty late. I simply needed to waste some time for one pesky quest NPC to come and yet I had nothing left to do. I didn't want to travel out of the city for the umptenth time again and then I remembered! Cowled Fools! I never liked them anyway, and by the word on the street, no one else did like them either. They even had the nerves to ask from me 5000 gold for the so-called "licence"!
Of course, I have to admit that these fights weren't that hard since my party was already pretty high lvl (had XP cap remove, no ToB tho). Main char was lvl 29 berserker, rest were tad lower, all in all pretty mean bunch. So I cast the spell and they came, and before any real time passed, they were all lying down, pushing up the daisies. All in all I think it was some 6-7 waves, before they in their last - but futile - attempt tried to opprehend me. The little mage squeaked something about 'facing their most powerful members' and then there were again bunch of them, 2 of them "named". Ah well, I sold their loot as well. No REP loss, nice XP (though I have seen better), OK cash from loot and scrolls (though I have seen better) and entertainment mainly. After that, everyone could cast as many spells as they liked, no fool came to mess with them.
But, you can do it at lower level also. If you handle liches without problems, then the Cowled Fools will be of no issue. Just remember that you will battle some 4 or so of them at once, so be sure you have the spells memorized. I fought them just outside of Mithrest Inn..
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