How would you react to an E2 who "smart mouths" you in formation?

Tell that yard birds and squad leader to stand fast, dismiss all others to their assigned duties.
After all have vacated either contact the top or have the squad leader hold your stripes. With no rank involved conclude the business of insubordination. If that does not finish it then it is time to go up the chain of command.

Let him/her know that it is a one way conversation and responses/opinions are not necessary. Then pull them aside afterwards and get down to the nuts and bolts of why they decided to put their two cents in. If there are underlying (off duty or outside) issues then hangle it accordingly. But if it is just insubordination then lay the smack down. Counseling is a must with some sort of paperwork to annotate a possible turd in the work center. But definitely say something tactfully and professionally to the individual in front of their peers to let everyone see that it won't be tolerated and you won't be punked like that by a lower ranking individual. Besides I got more time in the chow hall bathroom than they have in the military.

Front leaning rest for 12 hours

WTF, Oh hell no. You have 4 min. and 30 sec to get that shit done. Now

Take him behind closed doors and find what's bothering him and if nothing is and he just doesn't like the job task given then article 15..

Discipline

Throat punch to ground

Throat punch

Tell him he has become my shadow for the day and when I stop moving he will be in front leaning rest

Spinkicking shit