Chances are that most people know about martial art moves. I mean Master Duncan seemed famous in the Figaro region and it wasn't like Vargas wasn't pulling out some weird moves himself. Edgar most likely knew who Terra was so watching her in action threw him off because he just witnessed her do something that has not been seen by human eyes in a thousand years and he knew that, which is why he flipped out. There's also the issue that most of Sabin's more impressive moves are not available by the early stages of the game.