This verse is linked to the last phrase of the previous verse: "Him you shall hear, according to all you desired. . . ." The Israelites are to listen to the Prophet because, in their fear at Mount Sinai (Exodus 20:18-19), they had begged not to have any further direct contact with God Himself.
God tells Moses that the Israelites were correct in their fear. What does He mean by this? Probably, He means that they would indeed have died if they had had any further direct contact with Him. Paul gives a taste of the sheer terror and expectation of death the Israelites felt in Hebrews 12:18-21, 25-29.