The Londoners cheering lack empathy for the Salthook people.
We see this with many real-world patriots too: people who cheer their soldiers going to war, who identify with a national military effort in another country ("we invaded ...", "we won/lost ...", etc.), who call their country's soldiers "heroes". All of this without thinking about the actual reality of war: the hardship, injuries, deaths, including the deaths of innocents as well as of foreign soldiers who are, objectively, no more or less "heroes" than the ones from "their" country.
The sense of patriotic pride drowning out awareness of real horrors would be accentuated in the world of Mortal Engines. These people live in the era of Municipal Darwinism: when cities eating cities is the way of the world. When the world operates on that basis, many people would be happy at a victory for "their" city. Think of it, perhaps, like a victory in a football match; they don't think about the real horror and pain involved, because that's just how the world works.
Plus, this wouldn't be the first time London has gone chasing and hunting a smaller town. Some people who were squeamish to watch the first time might have become used to it over time. To take another real-world analogy, think of people who don't like to watch gruesome films - or, better, animals killing each other, in the original Darwinism. Watching a lion kill an antelope involves the real death of a real creature feeling real pain, but not everyone is going to be too horrified to watch such a thing.
Of course, the above doesn't necessarily apply to all Londoners. Some of them may have enough morals to find the chasing and consumption of other towns repugnant, or at least not to want to watch while it happens. But at least some proportion of the population is excited and oblivious enough to watch and cheer without noticing the human cost.
Salthook is small and easy meat, so there's little to no risk for London.
London is so much bigger and better armed than Salthook. The smaller town doesn't even try to stand and fight; running away is its only hope. They could try to fire something at London, but probably the big city has defence mechanisms that we aren't seeing - and in any case it would be a waste of time for Salthook, since even killing a chunk of Londoners wouldn't slow the city itself.
Plus, remember that the mentality of someone who wants to cheer the chase, without feeling empathy for the hapless Salthookers, is unlikely to be the kind of person who thinks overmuch about small risks. Again, there might be some percentage of people who do worry about the risk of injury from a Salthook projectile or booby trap, but those will be the Londoners who stay indoors. Enough people will not be concerned about that to make up the numbers of the cheering crowds.
From the point of view of the London authorities, there's no need to make a law against people coming out to cheer a chase. There's essentially no risk (as mentioned above), and such events are good at building nationalistic spirit hence loyalty to the regime. Equating the hunting of other towns with free entertainment just makes Municipal Darwinism more popular among the masses.