There is no third option.
They were either sitting in their vehicles drinking coffee and eating donuts, and were not inclined to even think about getting out of their vehicle and checking it out or cordoning off the area until they were good and ready.
When they did, the only thing missing was a good stretch, and yawn. Additionally, the person with the backpack was allowed to just saunter off.
Now, it could be me, but any LEO or government agent who is NOT "Completely, totally, unretrievably, irrevocably incompetent", after being informed by a passerby that there was something that looked suspiciously like a pipe bomb at the DNC on a day like that, would absolutely, 100% say to the person:
"Okay. Thank you, sir. (gets out of vehicle immediately). Would you be kind enough to stand over here for a minute or two while I call this in. I need to ask you a couple of questions. (All done between calling in the threat) Okay folks. Let's cordon off this area while we take a look. Joe, go take a look at that thing. What? You aren't going near it? Oh, right. Sorry...so, sir. I just need to take some information. What is your name, address, and phone number. When did you notice this thing..." Or they are in on it. Which would also explain their completely uninterested, lackadaisical manner.
I have since taken the time to drill down on it-it has to be option 2.
And the other thing that bugs me is the timer-it sure doesn't look like a 24 hour timer from what I can see. So it it was showing 20 min to detonation, and it was discovered at 12:40 PM...which is the time the vote activities were supposed to take place...how does that work?
How about both 1 and 2?