Or HaChaim on Numbers 13:28/אור החיים על במדבר י״ג:כ״ח

1 אפס כי עז העם, "However the people are tough, etc." Seeing that Moses had specifically asked them to determine if the people who inhabited that land were strong or weak, they now had to report that the people were indeed formidable. Not only that but they dwelled in heavily fortified towns. They concluded that part of their report by mentioning that they had observed giants in the land. They stated this so that the Israelites should not think that the fact that the towns were fortified revealed weakness and lack of self confidence by the inhabitants.

2The words העם היושב עליה also mean that the people do not only dwell in towns but are scattered all over the land, i.e. they are not afraid of being attacked. You will find that Bamidbar Rabbah on verse 29 interprets the fact that the Amalekites dwelled in the South of the land as proof that they did not live in townships. The words היושב בה are a hint that only people of extraordinary physique are able to live on that land successfully.