Quick answer
Nothing happens outside God's sight. He sees every place, and He is watching both kinds of people, which means the wicked have no hidden corner and the good have no unseen faithfulness.
Read both lines
The first line establishes range: every place, with no gaps in the coverage. The second line establishes what the watching is for, and this is where the verse is usually misread. The eyes are on "the evil and the good," both together, which makes the verse cut in two directions rather than one. To the person doing harm in private, it says the privacy is imaginary. To the person doing right where nobody notices, it says the obscurity is imaginary too. Chronicles uses the same picture and then goes further than this verse does, saying the eyes of the LORD run to and fro throughout the whole earth "to show Himself strong on behalf of those whose heart is loyal to Him" (2 Chronicles 16:9). That is a fuller claim than Proverbs makes here, and the two are worth keeping distinct. This verse establishes that nothing is unseen. Chronicles says what God does about it.
From this side of the cross
Whether being seen is dreadful or restful depends entirely on what the Seer is to you. For the believer, the eyes in every place belong to a Father, and the account was settled at the cross. Being fully known stops being exposure and becomes the ordinary condition of being loved.
Related: Proverbs 15:11 · 2 Chronicles 16:9 · Hebrews 4:13 · Psalm 139:7–8
New King James Version®, Copyright © 1982, Thomas Nelson. All rights reserved. Full copyright information. Scripture provided by API.Bible.
Go Deeper
If this verse has been used to put weight on you that it was never carrying, ask about it directly.