Detect Evil is one of those enigmatic spells that can be practical and useful, or it can be an over-the-top game ruiner.
My own take on it is that it detects powerful psychic energy of malicious intent. Powerful meaning it is a lot more than just a guy thinking about doing something bad. Powerful in this case means it is energy coming from a powerful spirit. "Negative energy" is one way to describe it, but I think that is limiting.
In Shatterworld, since nearly all magic is performed by the summoning of spirits, and those spirits generally resent being summoned, it seems that "Detect Evil" would detect the presence of most spells. It wouldn't be too far from detect magic. An Unseen Servant, a Phantasmal Force, an Interposing Hand or Clenched Fist are all high candidates for emanating "evil". I'm thinking maybe the issue it the very definition of the spell. To me, something called "Detect Other" seems more like what I'm going for. It gives the power to detect a presence that is unnatural. Maybe simply "Detect Spirit". And the spirit gives off a vibe... angry, sad, etc...
Likewise, instead of "Protection from Evil", it would be "Protection from Spirit"