Polarized Raman-scattering spectra of superconducting, single-crystalline FeSe evidence pronounced phonon anomalies with temperature reduction. A large 6.5% hardening of the B_1g(Fe) phonon mode is attributed to the suppression of local fluctuations of the iron spin state with the gradual decrease of the iron paramagnetic moment. The ab-initio lattice dynamic calculations support this conclusion. The enhancement of the low-frequency spectral weight above the structural phase transition temperature T_s and its change below T_s is discussed in relation with the opening of an energy gap between low (S=0) and higher spin states which prevents magnetic order in FeSe. The very narrow phonon line widths compared to observations in FeTe suggests the absence of intermediate spin states in the fluctuating spin state manifold in FeSe.
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