When we're being thanked - it's rather hard to know how to react.
Our modesty, or false modesty (I suppose) may compel us to downplay whatever it is we are being thanked for doing. Or, we feel uncomfortable getting attention we weren't expecting.
The thanks I'm talking about isn't the "thanks" we might hear or give when we respond to someone's request to pass the potatoes. It's more moment-altering stuff.
Maybe something we did made a significant impact on another person. It could have been the timing of a kind act or an actual life-saving action.
When we're on the receiving end of such a thanks, or just shared one - my suggestion on the "correct" response is to pause a moment, look the person in the eye, and say something like, "You're welcome," "I'm glad I could help," "You mean a lot to me, you know. You're welcome."
A thoughtful and genuine reaction to a sincere thank you is a wonderful, friendship-building moment; don't let it pass you.