" in " or " with " ?

[YOSHITAKEHORI]

I came across the follwoing sentence.
1. Can I put '' with '' as a preposition
instead of the underlined word? Why did this writer put "in"?
2. And what does '' with their pencils in the air " mean?
I would appreciate it if anyone coull tell me.
qot
A lot of art students sitting in front of their easels stared in surprise,
with their pencils in the air.
unqot

[Mister Micawber]

.
1-- in commonly collocates this way: I stared at him in shock/surprise/dread/amusement/etc. With also works there.

2-- They were shocked into immobility, with pencils raised, in mid-action.
.

[YOSHITAKEHORI]

.
1-- in commonly collocates this way: I stared at him in shock/surprise/dread/amusement/etc. With also works there.
2-- They were shocked into immobility, with pencils raised, in mid-action.
.

Mister Micawber
Thank you for your reply, and your other examples are also
of great use for me.