What is said in response to someone who says to you, "Fear Allah," and is the remembrance (dhikr) "O Allah, I seek refuge in You from associating anything with You knowingly, and I seek Your forgiveness for that which I do not know" correct, and is it permissible to say it always for the one suffering from obsessive thoughts (waswas)?

It is obligatory for the one who is commanded to fear Allah to accept the advice and shun arrogance. There is no transmitted wording to be recited by the one who is advised. As for the supplication: "O Allah, I seek refuge in You from associating partners with You knowingly, and I seek Your forgiveness for what I do not know," it is a confirmed supplication and may be recited daily.