In Exodus chapter twenty, verse twenty, the sights and sounds cause the Israelites to become afraid and to back off to the opposite side of the valley. Moses told them to stop being fearful with cowardly fear. God was using this display of power to inspire in them a godly fear and reverence that would help keep them from sinning.
Moses: by the help of the representatives and messengers, the heads of the tribes and elders to aid in addressing the large amount of Israelites, was telling them to fear not. The people of Israel reacted that way because they may recall the experience in Egypt. They remember the plagues God demonstrated with His power through Moses, which terrified Pharaoh and his people. The experience while living in Egypt may have contributed to affecting they’re of being afraid. Moses responds to the Israelites by advising them not to be fearful. They will do you no hurt; be not afraid of dying by the hand of God, at his presence, and through the voice of his words spoken to you; be of good courage, for the design of God is not to destroy you, but to instruct you, and do you good: for God has come to prove you.
The Israelites have been in Egyptian bondage for over four years, roughly four generations. They would have to adapt to accepting God to erase the memory of living under Pharaoh. The Israelites would now be subject to the laws and government of God instead of the Egyptian way. They agree to abide by what Moses said through the leaders. Whether the Israelites thought they had enough purity and righteousness to answer to the divine law or imagined they had the strength to fulfill it, they knew that Moses was the mediator between them and God. Since that was the case, the Israelites were willing to try.