There's a line from the book/movie Dune: anyone who can destroy a thing can control it.

Israel has the capacity to destroy Lebanon. They can destroy all of the areas where Hezbollah exists and much more. The war in Gaza has shown that they would do this if pushed.

I am sure that Israel does, reasonably, fear Hezbollah. But Hezbollah also knows what would happen if they pushed Israel too far. They would all die, along with many innocents. All of those missiles and fighters are good only to a point.