Yeah, humans and whalesquids have been living like that, tolerating each other, for who knows how long. The geezer captain even knew immediately what to do (stop all machines and be silent), which suggests close encounters have happened before, though not too often since the younger folks were ignorant.

It's true that if enough fear is brewed, more and more people would begin to think of exterminating the whalesquids, creating a situation similar to Ledo's people and Hideauze. However, these people all in all seem very peaceful so it'd take a lot to turn the tide to a bloodlust. Even if there are some among them, like Pinion, who have a personal reason to dislike the creatures. Many hold them sacred, after all.