I've seen both people running for their lives, as well as diving into close combat with a fork.
Most of the time, it makes sense. A Dragon appeared ohtside of Solitude, guards attacked, peasants fled, the Khajiit traders were undecided (weapons drawn, getting closer, then running off, then coming back to watch

) and all of a sudden, Beirand (the blacksmith) came out of the city and joined the fight with a mace.
Same with Riverwood. People were screaming and running off, but after a Dragon breath hit Dorthe, Sigrid got mad and attacked the Dragon with a rusty iron dagger

Never had that 'Everybody get inside' tough