I don't see why you can't say that the fight with the Dragon was never witnessed. Cloud was there. We don't know what the other Shinra soldiers were doing at the time. They started in the vehicle, but so did Sephiroth and Zack. At the end of the fight, they're all disembarked and headed into town. Ergo, they could have exited at any point. They almost certainly took a look outside at the monster that blocked their route, and at the great hero fighting it.