Hey, I know this has been discussed before but I couldn't find the thread, I have no idea how to use the search on this forum. I've tried it multiple times but it never leads anywhere, guess I must be doing something wrong.
On page 42 in the rulebook, there is a box called 'Resolving Unusual Attacks'.
There it says to follow step 4, 5 and 6 in the shooting phase (not step 2, which states the restrictions for targeting). It also says that the only exception to this are hits caused by close combat attacks, which is covered in the close combat section.
Attacks made by spells are unusual attacks, and all the restrictions (shooting into/out of combat and such) for spells is mentioned in the magic section of the book.
The Death Shriek specifically states it is a special attack which is used in the shooting phase. This means it is not a shooting attack, nor is it a close combat attack, which leads us to 'Resolving Unusual Attacks'. Also, the Terrorgheist has BS 0 which means it cannot use missile weapons. The attack says wounds are distributed as if from shooting. This does not mean it is a shooting attack, Impact hits are also distributed as if from shooting but I'm pretty sure none claims they are shooting attacks.
Because it is an unusual attack it does not have any targeting restriction besides those mentioned in the attack. The target needs to be in line of sight and within 8". Therefore it can target units engaged in close combat.