The second kind of fear we’re to strive for isn’t “fear” so much as a sense of awe, which Ramchal refers to as “a reverence for G-d’s Grandeur”. It comes down to being so very aware of G-d’s presence in your life that you’re dumbstruck by His nearness and deep effect upon you that your actions are washed, dried, and folded through and through with it.
So wholly captivated and undone by G-d’s presence would such a person be that he or she wouldn’t dare sin. “After all,” as Ramchal puts it, “how would it even occur” to such an individual “to do something that runs counter to G-d’s will”, knowing what he knows and sensing G-d’s presence as he does? Ramchal acknowledges, though, that “this sort of fear (or reverence) isn’t easy to come to”, since it only occurs to someone who regularly engages in “contemplation of the Grandeur of G-d” in this world, which few of us do.
In any event, such an individual “would be abashed (in the presence of) and would tremble when standing before, praying to, and serving his Maker”, for example.
But Ramchal doesn’t mean to advocate for some abstract sense of G-d’s presence that only affects a person from time to time — he’s depicting the need for us to acquire what he terms “the fear of sin”, or a sort of “applied awe”, as we might put it. It comes down to your “constantly fearing and worrying about the fact that your actions might contain a smidgen of transgression, or that there might be some small or even some large thing therein that simply isn’t fitting for the glory and grandeur of G-d”.
The difference between this sort of “applied fear” and the abstract reverence for G-d’s Grandeur is that while the latter “applies to when you’re either actually doing something, you’re in the midst of serving G-d, or you’re about to possibly sin”, G-d forbid, fear of sin would be more deeply felt. Of course one should “be abashed and ashamed, should shake and shiver for the loftiness of G-d’s honor,” and not lapse into sin. But there needs to be more, as we’ll see.