That would be a reasonable assumption, since it references both "hunt" and "prey". Admittedly, it doesn't put them together in the phrase "hunt prey", as seen in the TWF version of this feat, Twin takedown.
However, it targets "prey", and that is not a general use term used elsewhere in the system. The only thing that defines a creature as a "prey" mechanically is the "hunt prey" ability.
Yes, you can only target a creature you have designated as your prey with the Hunted Shot action. Hunted Shot reads:
"You take two quick shots against the one you hunt. Make two Strikes against your prey with the required weapon. If both hit the same creature, combine their damage for the purpose of resistances and weaknesses. Apply your multiple attack penalty to each Strike normally."
Funny if you needed to be your PRey , you think it would say that in the Requirements. DM always mentioned to us , don't read too much in the Spell/Ability description.. Guess that's just for players
This doesn't even make sense. Why would you ever not read the ability description that tells you what the ability does?