Well the soldiers saw it. Joffrey mentioned way earlier that there is no standing army, so I imagine they're just city folks who are going to see their family and other citizens at some point, especially with the entirety of the city cooped up in the red keep
Man, the citizens would be REALLY gross with Cersei if she killed her enemies and their dragon, thus preventing unimaginable amount of death in an instant and saving them and their family members. Boy oh boy would they be mad, especially since Cersei's been such an honorable, good girl. Like, seriously, what has she done aside from blowing up the church, the Pope so loved by the people no one could act against him, a ton of innocent people, the queen loved by the people, and caused the king to commit suicide. But other than that, what has she done? Nothing. No reason for her to squander her popularity just to, pfft, end the war instantly.
