They might be shocked. Luffy's Gear 5 is such a powerful and strange form. In the fanfiction, characters could be amazed at his new abilities, like his cartoon - like movements and seemingly limitless power.
Luffy Gear 5 Fanfic: In the heart of a new island, Luffy stood tall in his Gear 5 form. His body pulsed with a vibrant red energy as he faced the powerful new foe. 'I won't let you harm my friends!' he roared. With a swift motion, he stretched his arm like a rubber band, then snapped it forward, sending a shockwave of Haki towards the enemy. The foe tried to dodge but was caught in the blast, sent flying backwards. Luffy then bounced around the battlefield, his movements a blur, leaving trails of light as he continued his attack.
I think Shanks would have an interesting reaction. He has known Luffy since he was a kid. Seeing Luffy reach Gear 5, he would probably be proud but also a bit cautious. He might think about how far Luffy has come and also wonder what challenges this new power will bring for Luffy and the world at large.
Some characters might be amused. For example, Sans would probably make some witty remarks about the fanfiction's plot twists. Papyrus, on the other hand, might be a bit confused at first but then get really excited if he finds a heroic role for himself in the fanfiction.
Luffy uses Gear 5 in a significant battle towards the later part of the manga. But the exact chapter or arc can vary depending on how you're reading it.
One interesting idea could be exploring new abilities Luffy discovers within Gear 5 that he hasn't shown in the official story yet. For example, he might be able to manipulate his surroundings in even more creative ways, like turning the air into rubbery substances to create platforms or traps.
I think it's in a relatively recent chapter, but the exact one might vary depending on where you're reading the manga. You might need to check the latest updates.
In fanfiction, Luffy's character in Gear 5 might develop a greater sense of responsibility. Since Gear 5 is so powerful, he realizes he has to be more careful about using it. For example, he might avoid using it in areas where there are a lot of innocent bystanders.