Well, some might be really amazed. They could see a new side of Deku that they never knew before. His singing might show a different level of confidence or a hidden talent, so they would probably cheer him on.
One interesting plotline could be Deku having to face off against his classmates in a series of challenges that test not only their quirks but also their teamwork and strategic thinking. Maybe there's a misunderstanding that leads to the conflict.
Shigaraki is not dead in the manga. The storyline has many twists and turns, and his character plays a significant role, so his survival adds to the ongoing drama and suspense.
Deku himself is likely to shine. Given his powerful quirk and his growth throughout the main series, he'll surely put up a great fight against his classmates. Bakugo could also shine as he's always been in competition with Deku and has a very strong quirk.
Another theme is the exploration of their differences. Shigaraki represents chaos and destruction while Deku represents hope and heroism. Fanfics usually explore how these two opposing forces interact and influence each other. For example, in some fanfics, they start to understand each other's perspectives better as they spend more time together.
Bakugo would likely be furious. He'd feel betrayed and would probably be the first to attack Deku, yelling at him about how he's thrown away everything they've worked for. Uraraka might be more empathetic. She'd try to understand what drove Deku to become a villain and hope there's a way to bring him back to the side of good.