An AJAX request to one of my controller actions currently returns the full page HTML.
I only want it to return the HTML (.phtml contents) for that particular action.
I replied to this question and seems it maybe similar - Access ViewModel variables on dispatch event
Attach an event callback to the dispatch event trigger. Once this event triggers it should allow you to obtain the result of the action method by calling $e->getResult(). In the case of an action returning a ViewModel it should allow you to do the setTerminal() modification.