Awareness of the knowledge of God is a preventative for sin.
But God’s knowledge of us is also a grace to us, as Thomas Watson explains:
The infiniteness of God’s knowledge is a comfort, in case the saints have not a clear knowledge of themselves. They find so much corruption, that they judge they have no grace. Gen 25:52. ‘If it be so, why am I thus?’ If I have grace, why is my heart in so dead and earthly a frame? oh remember, God is of infinite knowledge, he can spy grace where thou canst not; he can see grace hid under corruption, as the stars may be hid under a cloud. God can see that holiness in thee which thou canst not discern in thyself; he can spy the flower of grace in thee, though overtopped with weeds. I Kings 14:13. ‘Because there is in him some good thing.’ God sees some good thing in his people, when they can see no good in themselves; and though they judge themselves, he will give them an absolution. [Body of Divinity.]
Words of Grace 