Phantom Masters begin appearing in the upper half of the Arqa Block in Tartarus. They will later appear on the floors of the love hotel on Shirakawa Boulevard during the July 7th Full Moon Operation.
Phantom Masters also appear in the second and third sections of Antenora within the Abyss of Time. While they are arguably less dangerous without their Mudo skill, they may be supported by Desirous Maya shadows which will open up party members to attack from Fire and Ice skills with the corresponding Break skill if they are immune to damage from those elements.
Persona 4
Phantom Masters appear in the Steamy Bathhouse dungeon of the Midnight Channel, however they must be summoned by Pursuing Pesce. Pursuing Pesce will summon Phantom Masters when a party member is afflicted with the Fear status effect. They may drop Magic Cloth upon being defeat, allowing for creation of the Mage's Mark accessory if 10 are collected.
Depending on the level of the party, goading Pursuing Pesce into using Evil Touch can be a problem, since guarding will prevent status effects from taking hold. Electing to escape will leave the character who chose the command unguarded, allowing the status to take hold. Phantom Masters may use the Ghastly Wail skill as soon as they act, instantly killing the afflicted party member.
Golden
Phantom Masters will be summoned by Pursuing Pesce when at least one character is afflicted with the Fear status, however they may also appear on their own. They may drop Smoky Quartz upon defeat.