وَنَسْتَغْفِرُ لِمُسِيئِهِمْ وَنَخَافُ عَلَيْهِمْ وَلَا نُقَنِّطُهُمْ
We seek forgiveness for sinful believers, fear for them, and do not drive them to despair of Allah's mercy.
The right response is to name wrongdoing as wrongdoing, seek reform and ask Allah to forgive the sinner. Fear of punishment remains, but utter despair is not imposed on the believer.
Condemnation of the sin and goodwill toward the sinner can coexist.