When using a heal ability outside of combat from a shortcut slot, the choice of people to heal is the player and NPCs spawned in the game. Members of the party are not in the list (they are not spawned outside of combat).
Using the ability from the "spellbook" works just fine outside of combat - all members are available as selections and none of the peasants are available. Inside combat is also fine.
The only choices should be members of the party.
And, the peasants spawn under their own faction that is neutral to the player's faction.
Want to add that Items react the same way. A healing potion works fine from the inventory menu. However, placing it on the shortcut slot - only allows me to select the spawned member of the party (and the peasants).
EDIT: Got rid of the peasants from the selection by setting their faction to non-ally and turning off their battle auto-start