1)
Why did they say "Lo Hu"?
1.
Rashi citing Targum Yonasan: Good [and evil] do[es] not come from Him.
2.
Radak: He does not supervise us and see our deeds. If we do like we want, evil will not come on us due to this.
3.
Malbim: They denied Hashem's existence.
2)
Why did they say "Cherev v'Ra'av Lo Nir'eh"?
1.
Radak: Even though His Nevi'im threaten us about this, this is Sheker. They do not get Nevu'ah from Hashem. He does not see us and know about us. Yonason translates like this.
2.
Malbim: Since they denied Hashem's existence, there is no punisher!
