Really though, of course Iris became afraid when she first saw Tsunbear, and of course would she still chose to go against it, even though it was an Ice-type. Did you really expect her to shy away from a challenge when the person she battles actually calls her out or talks **** and mocks her? That was Iris' defending Dragon-types, and she refused to back down - she even used her Kibago to battle because of that, and I know that Iris wouldn't have sent Axew in if she didn't think that he could win. She wouldn't let her phobia get the best of her, and thus she actually got determined and stayed for the battle. It's much different from Dento's situation, Langley's tougher and much more violent.
I still have yet to see the episode due to my shitty bandwidth at the moment, but I'm confident it was a nice development episode.