Allies & Foes: Objective or Subjective?

Rules Questions

During play, our group could not agree on whether Blistering Invective would affect undetected enemies in the area. The two sides of the debate are, I believe,

No: The caster chooses who their enemies are when casting spells that affect "enemies" (and likewise for allies). Because the caster was unaware of these creatures when casting Blistering Invective, they could not be harmed.

Yes: The laws of magic determine enemies and allies, thereby making the distinction objective. Any creature wishing you harm is an enemy, while all others are allies.

Perhaps this is already answered in the rules and we've just missed it? If not, how do other groups handle these situations?

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