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It casts, but doesn't take into account the target's immunities. I saw it cast on a unit that was immune to it. It hits in an area, but it costs action points, but one such spell on the right target... hehe. Once, it wiped out half my army.
Not a very powerful spell, is it? It has considerable power, even very high.
Added 1 minute ago
By the way, it's not just Plague. It also casts Weakness.