Fleshformer's ability has only one target: the creature. If that creature becomes an illegal target by the time Fleshformer's ability would resolve, the entire ability doesn't resolve. Fleshformer won't get +2/+2 and won't gain fear.

Fleshformer can target itself with its ability. The result is that Fleshformer gains fear, since the +2/+2 and -2/-2 parts of the effect will balance each other out. (Fleshformer's power and toughness will each momentarily go up by 2, in case anything cares about that.)