I usually think of "cringe" as vicarious embarrassment. You look at someone doing something that you would have felt deeply embarrassed about having done (Maybe you have done it, or something uncomfortably close to it, in the past).

I think it's a kind of involuntary empathy in a strictly mechanical sense - feeling as if you were that person when you look at them. Because when you think about it coldly, it's not obvious why you should care that other people are embarrassing themselves.

So it's not empathy in the ethical sense. On the contrary, people who talk about "cringe" are often fiercely angry at the people making them feel this way.