I'm not sure if I was sound asleep, that I would hear them shouting POLICE!
If he's like me and doesn't hear all that well..and he was sound asleep...I can see how it could happen.
Nor would I, probably. Having been jolted out of deep sleep by alarms/loud noises in the past, I can say that the combination of sudden wakefulness, adrenaline, dark and brief disorientation combine to make situations that appear perfectly understandable to us during waking hours into something far less than clear cut.
Having to respond properly and quickly in a deadly force situation under such circumstances is one of my worst nightmares, to be honest. I don't know the details of this case, but I can certainly understand how such a scenario could go very badly awry.