。
At the sight, she stepped back in terror.
Literal
She [topic-は] that scene [object-を] saw [て] terror [from-で] stepped-back.
後ずさり is a noun for 'stepping/moving backward,' often involuntarily, in fear or revulsion; 後ずさりする makes it a verb. 恐怖で uses で in its cause sense: 'with/from terror.' The te-form 見て links the seeing and the recoiling: 'saw [it] and [as a result] stepped back.' 光景 ('sight, scene, spectacle') is a slightly more vivid noun than 場面 — emphasizing what is visually witnessed, often with emotional weight (shocking sight, beautiful sight, eerie scene).