“The servants of the Most Merciful” are those upon whom Allah has showered mercy and guided to all that is good. They are the ones who “walk upon the earth with humility”; when you observe any one of them, you see a person whose gait is marked by dignity, untainted by the kind of hurriedness that mars one’s demeanor.
“As for the words, “and when the ignorant address them, they respond with words of peace,” the meaning is that they utter speech that shields them from the ignorant person’s harm. The verse does not require them to extend the greeting of peace; rather, if an ignorant man confronts them, they reply in a way that protects them from his evil—either by countering with what is better or, when silence is preferable, by remaining silent. The point is to say something that secures their own safety. Dealing with an ignorant person is fraught with danger: if you argue with him, he may blurt out offensive words against you, or even against the truth you are calling him to, reviling the religion itself—God forbid. Hence, by Allah’s enabling grace, the servants of the Most Merciful respond in a manner that keeps them safe and free of sin.
Among their other traits is what the subsequent verses mention: “and those who do not bear witness to falsehood,” meaning they neither testify to lies nor involve themselves in shameful deeds. “And when they pass by idle talk”—speech that carries neither benefit nor harm—“they pass by with dignity,” leaving it behind unharmed.