Or HaChaim on Exodus 14:31/אור החיים על שמות י״ד:ל״א

1 וייראו העם את ה׳… ואת משה עבדו The people feared the Lord …and they believed in His servant Moses. This was not fear of punishment but awe of the Majesty of G'd. The fear of punishment they had possessed already prior to the Exodus. According to what we explained on 12,43 that the Israelites did not accept the commandment of the King (G'd), they did not even fear to be punished by G'd otherwise they would not have remained uncircumcised until that time. At any rate the fear described in this verse is that they stood in awe at G'd's Majesty. When the Torah describes the Israelites as "believing," this was the reward for their fear of G'd's Majesty.