He knows that he pretty much has to do what Abis Mal tells him to do until he’s made his third wish (having tricked him out of the first two), so he just scares the bejeezus out of him anytime he starts talking about wishes. This isn’t a man afraid of being killed. This is a man afraid of the genie that’s going to intentionally misinterpret his wish.
And Iago might not be a favorite among fans, but at least it can be said that he goes through genuine growth in the film. He’s changed enough well before this point that the choice to screw someone over because Jafar told him to is no longer an immediately simple thing to do. This is pretty much the moment he becomes the character that follows into the rest of the TV series.
Oh, and then Jafar sings a song at the Genie about how his powers are better. This could have been a lot more interesting. The notion that Genie is now “semi-phenomenal, nearly cosmic” is touched on here and several times during the series. He recognizes that he has become limited, and I like to think that a lot of his fail!antics here and in the series are because he’s so unaccustomed to being so limited.
He’s used to that shit just working.
And this could have been a fun conflict to explore, especially since Jafar even refers to the comparison between the two of them as a rivalry, but not enough time goes into playing around with this for it to really mean anything. We could have had a genuine moment where Genie wonders if he really is better off free from the lamp, because he lacks the power he used to have, ultimately deciding that yes, freedom is worth it and he knows Jafar envies him that now.
Kind of a big point this could have been, considering Jafar was the only person in the original movie who pointedly referred to him as “slave.”
Also interesting that Genie spends MOST of this movie, with few exceptions, with legs, as a way of showing he’s no longer bound to the lamp (as opposed to losing his bracelets). In fact, I don’t think you even SEE the lamp in this movie.
I’ll be interested to look for when it first pops up in the series.
Also what the Hell, Jafar:
Because we needed creepy imagery AND a rhyme.
The DVD Fairy 