You are right. She should have shot him, but I expect she forgot to bring her gun.
I think bouncers and/or gendarmes were the proper way to handle this situation. Then she would be free, and he would still be locked up in a Cretan jail trying to get money from family and friends to bribe the Jefe to let him out.
Nevertheless, the second article made a lot more sense - perhaps she threw a well deserved drink on him and then he managed to light himself up fumbling around with a cigarette lighter.
Overall, not a good way to spend the last night of one’s holiday, but better than Natalie Holloway’s last night on Aruba. Reminiscent though, in a way.