That is a tricky balancing act in these games. The best ones do a really good job of building up that tension and creepy atmosphere. The problem, of course, is that action is almost by definition a release of tension. And I can't think of a more literal interpretation of "facing your fears" than shooting it in the face with a shotgun.
That is why I really enjoyed the early Silent Hill games so much (and Resident Evil 1, as well.) Partly
because of the clunky combat mechanics, but it always felt like you
could technically defeat every monster you encountered - it just wasn't worth the effort. And of course the survival in survival horror meant that you needed to be saving that ammunition and health items for bigger and scarier monsters down the line.
Silent Hill 3 especially (for me at least,) I became so conditioned to that static radio sound that every time I heard it I'd just run off down the hallway. The scariest stuff in my experiences was when I didn't even see what was chasing me. The atmosphere and tension could often build up enough that just the idea that I was being chased was enough of a scare.