It was not an uncommon practice for vessels like the Kormoran to finish off survivors...they didn’t want them to be picked up and spill the beans to any other ships about the nature of their ship. They depended on surprise.
It could be that even though mortally damaged, the ship was afloat and stable long enough to murder everyone in the water from the Sydney, but sank at some point shortly therafter.
But...it is all speculation
Despite the point of “common practice” what's the use of finishing off survivors when your own ship is sinking?
The nature of the Kormoran was known. The Royal Navy got pictures like the one above at post #14 to identify the raider.