But at the time, Indonesia did not allow dual citizenship. Hence, he could not be a US citizen when he had the Indonesian passport.
That's kind of a circular argument. His maintaining US citizenship may have been a violation of Indonesian law. However, I haven't seen any evidence that he affirmatively renounced his US citizenship- there's no way to automatically lose US citizenship, you have to do so through a proceeding under US law. Like I said, I have no idea what Indonesian law is in this regard, but it isn't really relevant to whether or not he ever gave up US citizenship.
Yes he could. Indonesia doesn't allow dual citizenship but we do.
Intent can be shown by the person's statements or conduct.The U.S. Government recognizes that dual nationality exists but does not encourage it as a matter of policy because of the problems it may cause. Claims of other countries on dual national U.S. citizens may conflict with U.S. law, and dual nationality may limit U.S. Government efforts to assist citizens abroad. The country where a dual national is located generally has a stronger claim to that person's allegiance.