I think it's less that they are scared that he is strong, and more that they are rapidly running out of potential methods to deal with him if they ever had to. You have to remember, these people have probably only ever had limited interactions with humans at best. Most of what they know is probably either passed down through the generations, or from rumors they pick up when they do interact.
So what Usato just did is basically having a person from one of your greatest enemy's team suddenly wander up to your town, unannounced, unprovoked, with one of your group's members moving with him for some unknown reason, and with a tank following right behind him (the bear) that isn't bound by a contract or leash.
Then his first interaction with you is to physically surpass you in terms of physical capabilities (and by no small margin either), and your race is internationally known for being one of if not the best race for them.
He comes off as being polite, but his companions still call him weird and sometimes even a monster. Then he goes on to destroy an ax and the surrounding ground just by swinging it downwards while chopping wood. And after that, he beats not just a few members of your community, but nearly every able bodied man in arm wrestling, without taking a break or losing even once.
Add on top of that the fact that he was brought here for the use of his healing abilities, meaning to everyone not aware of the rescue unit, this makes them think he isn't even close to being in a combat orientated position or role. He is actually a non-combatant, a civilian, someone who shouldn't even be involved in combat (outside of taking care of the wounded), and yet is still this powerful.
To them, they are likely thinking that if this guy isn't even a soldier, then what kind of strength or powers could the actual fighters have that he couldn't even find a place amongst their ranks? And what could we do if he suddenly turns hostile, or starts to demand things from us. What if he wants my body despite me already having a partner? Would he kill my husband/wife just to deny me an excuse? What if he is going to threaten us or extort us after he does us a service?