SHEYKHAN, Afghanistan—Taliban forces led by Mohammed Fazl swept through this village on the Shomali plain north of Kabul in 1999 in a scorched-earth offensive that prompted some 300,000 people to flee for their lives.

Fifteen years later, local residents here are responding with fear and dismay to the U.S. release of the notorious commander, along with four other Taliban leaders in exchange for Sgt. Bowe Bergdahl, the only American prisoner of war who was held by the Taliban. The group released a video on Wednesday showing...