"And Moses said to the people: Do not fear" (Exodus 20:17). Here Moses encourages them, to make known the wisdom of Moses, how he stood and pacified all those thousands and all those myriads. Concerning him it is explained in the tradition [Writings] "Wisdom strengthens the wise" and so forth (Ecclesiastes 7:19). "For God has come in order to test you": in order to make you great among the nations, like a banner of a ship. "And so that the fear of Him may be upon your faces": it is a good sign in a person that he is bashful. "So that you do not sin": this tells that shame brings one to the fear of sin, as it is said "They acted shamefully, for they committed an abomination, yet they were not at all ashamed" (Jeremiah 6:15). It was taught: "And so that the fear of Him may be upon your faces, so that you do not sin" refers to shame; this teaches that shame brings one to the fear of sin. From here they said: it is a fine sign in a person that he is bashful. Others say: anyone who feels shame will not readily sin, and whoever has no shame upon his face, it is known that his ancestors did not stand at Mount Sinai.
Why a Sense of Shame Is the Mark of Sinai
Yalkut Shimoni on Torah 301:2
וַיֹּאמַר מֹשֶׁה אֶל הָעָם אַל תִּירָאוּ, הֲרֵי מֹשֶׁה מְזָרְזָן, לְהוֹדִיעַ חָכְמָתוֹ שֶׁל מֹשֶׁה הֵיאַךְ הָיָה עוֹמֵד וּמְפַיֵּס כָּל אוֹתָן הָאֲלָפִים וְכָל אוֹתָן הָרְבָבוֹת, עָלָיו מְפֹרָשׁ בַּקַּבָּלָה "הַחָכְמָה תָּעֹז לֶחָכָם" וְגוֹ'. כִּי לְבַעֲבוּר נַסּוֹת אֶתְכֶם, בִּשְׁבִיל לְגַדֵּל אֶתְכֶם בֵּין הָאֻמּוֹת כַּנֵּס הַזֶּה שֶׁל סְפִינָה. וּבַעֲבוּר תִּהְיֶה יִרְאָתוֹ עַל פְּנֵיכֶם, סִימָן טוֹב הוּא בָּאָדָם שֶׁהוּא בַּיְּשָׁן. לְבִלְתִּי תֶחֱטָאוּ, מַגִּיד שֶׁבּוּשָׁה מְבִיאָה לִידֵי יִרְאַת חֵטְא, שֶׁנֶּאֱמַר (ירמיה ו, טו) "הוֹבִישׁוּ כִּי תוֹעֵבָה עָשׂוּ גַּם בּוֹשׁ לֹא יֵבוֹשׁוּ". תַּנְיָא וּבַעֲבוּר תִּהְיֶה יִרְאָתוֹ עַל פְּנֵיכֶם לְבִלְתִּי תֶחֱטָאוּ, זוֹ בּוּשָׁה, מְלַמֵּד שֶׁהַבּוּשָׁה מְבִיאָה לִידֵי יִרְאַת חֵטְא. מִכָּאן אָמְרוּ סִמָּן יָפֶה בְּאָדָם שֶׁהוּא בַּיְּשָׁן. אֲחֵרִים אוֹמְרִים כָּל אָדָם הַמִּתְבַּיֵּשׁ לֹא בִּמְהֵרָה הוּא חוֹטֵא, וּמִי שֶׁאֵין לוֹ בֹּשֶׁת פָּנִים, בְּיָדוּעַ שֶׁלֹּא עָמְדוּ אֲבוֹתָיו עַל הַר סִינַי.