1 John 4:16-19
King James Version
16 And we have known and believed the love that God hath to us. God is love; and he that dwelleth in love dwelleth in God, and God in him.
17 Herein is our love made perfect, that we may have boldness in the day of judgment: because as he is, so are we in this world.
18 There is no fear in love; but perfect love casteth out fear: because fear hath torment. He that feareth is not made perfect in love.
19 We love him, because he first loved us.
I think the first thing we need to recognize is the aspect of our sanctification John is referring to.
He does not say we have perfect love, but tells us how our love is made perfect: our recognition of God's love for us individually.
And the fear in view is fear that God does not love us.
The Greek word for perfect speaks of completion, and it has to be kept in mind whther something has been made perfect/complete or is in the process of being made perfect/complete. We have been made "perfect" in regard to remission of sins forever, but that does not mean we do not still sin, have need to confess that sin, and appeal to our Advocate, the Author and Perfecter (completer, finisher) of our faith.
This passage has an ongoing and open-ended application because it is not likely that anyone is ever going to have "perfect love as our Father in Heaven has for us. If there is someone here that thinks they are perfect in love, I would be glad to see them come forward and let us all in on just exactly how they were able to arrive at such perfection, free from the biases most of us deal with in life.
We also have to distinguish between the judgment we will receive as believers (for that is who John is writing to) and the judgment that is to fall on those who know not God and obey not the Gospel (which itself requires distinction between those in this Age and other ages).
What we cannot do is divorce a very simple command of Christ—to fear God and the Hell He will destroy unbelievers in—from the teachings of Scripture. To base that on how believers are to live within the sanctification process with the fate of those that are not even sanctified by the Sacrifice of Christ is a blatant departure from basic reading skills.
God gave us His Word for the express purpose that we know His will for our lives. It was not written as a magic book, or a code book that only those who have the magic decoder ring can understand, but as a simple testament of His will for man, and understandable by all men if they will but obey what He says.
Let them that have ears hear.
Not, let the scholars make sure they get it right, so those poor folk Scripture wasn't intended for aren't blamed needlessly.
Not sure if that is what you were meaning, but this passage has an application to believers and the sanctification process. Progressive Sanctification, not Positional Sanctification.
For myself, there is much in my walk with Christ I expect to be held accountable for, but, I do know that God loves me, and that regardless of reward or lack thereof—I will spend eternity with Him.
What I will also say is an interpretation of this passage as meaning "You can't scare people into obedience to God" or that fear generated by the Doctrine of Hell lacks love completely misses one of the most basic principles we have in Scripture: God is God, and we are men.
I'd be curious to know what universal salvation does with this:
Proverbs 23:13-14
King James Version
13 Withhold not correction from the child: for if thou beatest him with the rod, he shall not die.
14 Thou shalt beat him with the rod, and shalt deliver his soul from hell.
Does God mean for us to believe that we are to use correction to scare the Sheol out of children?
God bless.