This is not what I expected the proverb to say. I would have expected it to say “The coward says, ‘There is a lion outside! I shall be slain in the streets!’” But it says, “sluggard,” not “coward.” So the controlling emotion here is laziness, not fear.
But what does laziness have to do with the danger of a lion in the street? We don't say, “This man is too lazy to go do his work because there is a lion outside.”
The point is that the sluggard creates imaginary circumstances to justify not doing his work, and thus shifts the focus from the vice of his laziness to the danger of lions. No one will approve his staying in the house all day just because he is lazy.
One profound biblical insight we need to know is that our heart exploits our mind to justify what the heart wants. That is, our deepest desires precede the rational functioning of our minds and incline the mind to perceive and think in a way that will make the desires look right.
This is what the sluggard is doing. He deeply desires to stay at home and not work. There is no good reason to stay at home. So what does he do? Does he overcome his bad desire? No, he uses his mind to create unreal circumstances to justify his desire.
Doing the evil we love makes us hostile to the light of truth. In this condition the mind becomes a factory of half-truths, equivocations, evasions and lies — anything to protect the evil desires of the heart from exposure and destruction.
Consider and be wise.